How to finance IT deals with Vendor’s own money

One of Silver Bullet Associates’ clients was asking me the other day whether I knew of any readily available sources of finance that could help them fund some business critical IT projects. When I suggested he ask his IT vendors to help fund things, he looked at me as if I had grown a second head. So I explained to him that the big IT companies have always hoarded cash on a huge scale. Today, Cisco is sitting on $26bn in cash and short term investments while Microsoft has over $20bn and Oracle has over $10bn in their respective current accounts. In an era when capital markets have dried up and banks are loathe to lend, businesses are finding it hard to fund initiatives. IT vendors are acutely aware of this, and some of them are starting to bankroll their customers purchases. They may not be drawing on their cash mountains directly, but they are using their AAA credit status to enable customers to defer payments or spread payments over 2 or 3 years at minium or zero cost. In the past few months, we’ve seen Microsoft, HP, SAP and others offer 0% financing to some clients to help them fund new purchases. If you have some IT projects currently on ice which you might be able to defrost with some creative vendor financing, then it’s worth you asking your IT vendors what they can do for you!

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