Monday, 14 February 2011

Why offer your clients a financing option ?

Some replies we often get from IT Vendors:

1. "All our clients are large, blue chip companies, who don't need finance" - Due to the considerable tax benefits associated with leasing (making it cheaper than paying cash), 89% of Times Top 100 companies are now leasing their IT Equipment.

2. "Our clients always pay cash" - Great, but do you actually see their cheque when it comes in? - Often they are using a finance company without you realising and the delay in you getting the order is actually due to the client trying to source the finance. Also, Do you get the cash the same day you deliver the equipment? Are you waiting 30 days or more for your money ? Do you have to handle payment and collection issues?

3. " There's no requirement for finance from our clients as they never ask us for financing" - That's because most companies still don't realize that you can finance software ! Their banks/finance companies will happily finance their cars and machinery, and maybe even their Hardware, but as most lenders won't consider funding software, many companies still don't realize that it can be done.

4. " We offer the manufacturers recommended finance scheme" - So you're a Reseller, selling the same products as your competitors and offering the same finance scheme? Wouldn't you like another way to differentiate your offering?

Aside from the obvious benefits to the client (including the tax benefit), you will benefit from:-

* Accelerated ROI - It's easy to demonstrate this through the client paying for the system on a pay as you use scenario

* Shorter Sales Cycle - By bypassing budgetary constraints and offering a monthly option, many FD's are able to sign this off without having to get board approval

* Increased Sales - By simply making the product more affordable, you will win more business and clients will be able to order more product from you

* Increased Profit - Clients are less likely to ask for discounts when offered a monthly payment rather than a large lump sum.

* Faster cash - You will be paid within 24 hours of the client installation