May 18, 2011

How do VARs benefit from providing a leasing option?

I recently read a blog post from Dan Blacharski called "Vendor Financing Hard to Come By" which he posted in 2009 and I am curious how VARs are benefiting from finance options today. My company provides financing solutions to VARs which can work with any OEM, software and service they provide and have found that by providing a lease payment during the onset of the sales process can help shorten the sales cycle and put the focus on VALUE instead of price...which is (as anyone in sales knows) the best way to increase margin and customer satisfaction. How has your business benefited by providing a finance solution? Do you recommend offering financing to your peers?

(referencing http://www.itworld.com/channel/62518/vendor-financing-hard-come)


The solution also involves considering both a leasing and a financing option. Outright financing may be harder to qualify for in today's market, and it leaves customers open to the possibility of the term of the loan outliving the product itself, especially if the technology refresh cycle is relatively short, as is often the case.


In the original article, I had mentioned that VARs were having a hard time finding customer financing options for products they carry, and that makes the sales cycle longer and a little more precarious. Larger OEMs are still providing financing options--but only for their own products. The problem still exists, especially when it comes to small businesses. Interest rates are of course, at an all time low, which is great if you can get the credit. But small business customers are often on the short end of the stick when it comes to getting qualified for loans, so whenever a VAR can offer a financing option--any financing option--to its customers, it will have a big edge over the competition.

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