Cisco Capital Offers Alternative Financing Source

By Lauren Simonds | Posted April 06, 2009

Faced with a challenging economy and painfully tight credit, small businesses need alternative sources of cash – both to keep the doors open and to stay competitive in a an increasingly tough market. The financial subsidiaries of technology vendors, such as Dell or HP, are good sources of alternative funding. But another such source that many small businesses may not know about is Cisco Capital Finance.

Until recently, the name Cisco was synonymous with enterprise technology, which was generally considered out of reach for small business. But last November, the company announced a $100 million global small-business initiative that included, among other things, security, collaboration and storage hardware solutions.

Cisco Capital Finance is a wholly-owned subsidiary of Cisco and as such, according to Maryann Von Seggern, the company’s director of world-wide channels, is in a better position to help small businesses than are traditional lenders.

“These are unprecedented times, and securing alternate sources of financing has never been more critical for small businesses.” said Von Seggern. “Two trillion dollars of liquidity has disappeared from credit card companies and banks. We’re able to leverage Cisco’s balance sheet – more than 30 billion dollars in cash – to help small businesses finance their technology.”

She added that the company practices “prudent lending policies,” and that applicants are subject to credit review. “We’re not a lender of last resort. You must have the wherewithal to make monthly payments,” Von Seggern said. “If your company’s hemorrhaging money: no dice.”

Financing technology through your tech vendor is, said Von Seggern, very similar to leasing a car: you pay minimal money down, and at the end of the lease you trade your car in for a new model. In terms of your business, you have predictable payments without a big upfront cost, and you’re computer equipment keeps pace with the latest technology.

Financing is a strategy large enterprises use as a way to manage their technology lifecycle. This practice, Von Seggern said, lets them

  • Accelerate technology adoption
  • Make predictable periodic payments
  • Conserve cash flow
  • Spend cash on other business investments/opportunities

This strategy is not limited to the big boys – SMBs can play that game, too, to good affect. It requires a change in mindset, said Von Seggern. Instead of using a credit card to purchse a $10-$15,000 solution, she recommends obtaining the funds through the financial arm of their tech vendor.

“Don’t buy technology outright. In three or four years you’ll be stuck with old equipment you can’t replace,” she said. “For example, lease a phone system and invest the money you would have spent in people or acquisitions for your business.”

SMB Finance Offers

Currently Cisco Capital has two offers for small businesses. The first is what Von Seggern calls “a true zero percent” financing on Cisco’s Unified Communication 500 Series for Small Business.

The second consists of no payments or interest on the first three months of financing on any Cisco products or bundled services. You’ll find more information on Cisco Capital’s small business financing here.

Lauren Simonds is the managing editor of SmallBusinessComputing.com

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!


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