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  • Views from the flipside
  • Technology Suppliers exposed to potential multi-million funding ‘hole’

Views from the flipside

tls-460.jpgThe UK vendor finance market for IT and business equipment is worth over £1.3 billion[1].  As finance provider, GE announces it will now “streamline” its offering to the British technology industry, experts are warning the sector could experience a significant “funding gap” running into multiple millions. 

This month, GE reduced their IT and business equipment funding to focus on the provision of finance for healthcare and other GE manufactured equipment. In response, LDF, the largest independent provider of finance to small businesses in the UK, issued a timely warning to technology equipment vendors: be prepared now, to avoid potentially damaging financial cost.  LDF urge GE customers not to “wait in line”, as early indications show that if businesses don’t plan in advance, a “bottleneck” of technology resellers seeking replacement leasing solutions for customers is likely to form.

For many technology resellers, business is based predominantly on selling technology solutions (hardware, software and services) as a ‘bundled’ offering with a monthly or quarterly leasing cost.  This helps those businesses who are reliant on finance as a means to buy, where cash flow is not always in reach.  Equally, if this option wasn’t available, or was removed, it would have a significant impact on many technology resellers finance and income opportunity.

The impact of not finding the right finance partner is fourfold:

  • A significant increase in leasing rates will result in a loss of income
  • A change in leasing acceptance rates will result in a loss of deals
  • A reduction in service levels from a leasing provider could result in a loss of customers
  • Failing to find a finance partner who can offer a like-for-like alternative will result in longer lead times, loss of business and internal costs associated to a change in sales processes

One supplier who wishes to remain anonymous, as not to jeopardise any remaining lines into the provider disclosed that they have already had notice issued affecting almost £750k of their £1m turnover.  “We were issued just 30 days on the accounts we had running with GE, which is not a lot of time to find a solution. Thankfully, we were already in talks with LDF who were so well versed on our industry they had a pre-prepared product, TLS (Technology Leasing Solution), and it meant we could safeguard existing business, secure pending contracts and maintain our current sales model.”

Rob Hulse, LDF’s head of channel development, says:

"News of GE’s streamlined activity could pose a significant challenge to the UK vendor market and as such, LDF are pleased to be able to provide a financial solution to meet the demands of technology suppliers at a time when they are going to need it and with £400m already committed to assisting UK enterprises this year, we are confident that we can directly assist businesses affected by this change with a recovery plan.”

Find out more about LDF's Technology Leasing Solution and discover how the LDF Partner Programme can help your business grow. Alternatively call us on 01244 525410 to discuss your requirments in more detail.
Remove the uncertainty and switch to LDF's Technology

[1] For the 12 months to July 2016 - FLA figures http://www.fla.org.uk/index.php/research/asset/

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Views from the flipside

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