IT majors give loans to SMEs

Cisco, IBM, HP among those waho are providing in-house finance solutions to small and medium enterprises

Sufficient funds should no longer be a hindrance to investing in technology for small and medium enterprises (SMEs) as information technology (IT) companies themselves have come forward to provide finance options.

According to a recent study by AMI Partners, SMEs in India are planning to spend more than $8 billion in 2007 to beef up their IT infrastructures, which represents a robust 24 percent increase from last year. This provides a huge opportunity for IT companies to tap into this market.

For instance Cisco Capital, part of global networking company Cisco, recently launched its Easy Lease scheme in India. This financing programme enables SMEs to adopt state-of-the-art network technology quickly and easily, with minimal initial investment.

SMEs can maintain consistent and balanced operating and capital expenditures, by making payments on a monthly or quarterly basis. Easy Lease offers streamlined lease documentation, flexible payment options and fast turnaround.

As part of Cisco's continuing commitment to help SMEs and mid-sized companies invest in smart data and communications solutions, Cisco Capital announced the launch of Easy Lease in India.

This innovative financing program is designed to enable SMEs to adopt state-of-the-art network technology quickly and easily, with minimal initial investment and maximum convenience.

"Indian SMEs understand the critical transformative impact that technology can have on their businesses, but are too often hampered by budget issues that restrict their ability to purchase the equipment they need," said Gautam Munish, leasing country manager for Cisco Capital India.

"Easy Lease financing actively supports Indian SMEs in their effort to improve their business environment and compete in the local and international marketplace," he adds.

Cisco Capital financing in India is available through Cisco certified channel partners for all Cisco products and services. The Easy Lease program is currently available at a special rate of 7 per cent for a 12 to 36 month term. The program can provide financing for transactions ranging from Rs 10 lakh to Rs 80 lakh.

Global IT giant, IBM is also keen on this business opportunity. "We finance partners for their working capital need and have also increased our focus on financing schemes for the SMEs, " explains, Ramesh Narasimhan, director, GSMB, IBM India/South Asia.

IBM recently launched its IBM Financing Advantage (IFA) for the mid-market segment. It offers customers and business partner's complete single-source financing at competitive rates, featuring easy access to leases and loans for IBM and non-IBM hardware, IBM software and IBM services, and a full range of buyback, recycling and scrap services to help manage costs, while simultaneously funding growth.

"SMEs need to focus on their core businesses all the while knowing they have end-to-end support for their IT infrastructure as they grow. Any organisation can benefit from the reduced costs, simplified budgeting, credit preservation and flexibility provided by financing. Here is where IBM Financing Advantage comes in," adds Narasimhan.

Hewlett-Packard, is also aggressively pursuing this segment, with its financial services. Smart Finance Service is a complete acquire-to-retire suite of financial services.

Organisations with employees less than 100 or turnover of less than 100 crore are serviced by HP Smart Finance. While medium businesses organisations with employees between 100 and 999 and turnover of Rs 100 to Rs 2000 crore come under the ambit of HP's Financial Services.

The Smart Finance Service, is aimed at making technology solutions easy to own and easy on the balance sheet. "We aim at providing total IT solutions right from software, hardware and data centres," says Ashok Pamidi, from HP India.

He further says, "We offer a range of payment option for our SME clients customised to our clients needs ranging from monthly, quarterly and pay for use payment."

HP recently lowered rates for its Smart Office Leases programme. When a client applies for financing through HP Financial Services, HP will give Premiere Pricing rates. Then, based on their credit review, the client will be able to take advantage of the Premiere Pricing or qualify for one of HP's other low rates.