Money Talks when it comes to IT Financing

Financing a business can be a tricky thing, but it does not have to be. At least, not according to Finlease IT director, Val Lorenzelli (VL), and technology finance specialist, Bill McMullan (BM). Patrick Budmar from ARN (Australian Reseller News) reports (PB).

PB: How did Finlease come about?
VL: Finlease is a privately owned finance broking business and we’ve been around since 1989. My business partner Mark O’Donoghue started it all those years ago and I joined 12 years ago.  We mainly facilitate for SMB’s which can be a piece of computer equipment to print press to an aeroplane and anything in between.  We would normally get business by dealing through reseller channels. We lend about $350 million a year, but we’re not in the $100 million dollar a year deal business. We’re somewhere in the $5000 to $1 million types of transactions.

PB: How does IT fit into Finlease?
BM:  We’re offering a range of tailored solutions via the reseller market to service their end users. Senior management at Finlease  conducted market research and there was a belief that, in a certain segment of the IT market, there was an opportunity for someone to come in and finance that smaller end. So Finlease recruited me to lead that thrust into that SMB segment via the reseller market.

PB: What are some of the challenges you are encountering?
BM: We don’t have so many challenges as if we were resellers, as I guess we’re the solutions provider. We’re a value-add to the reseller community by partnering with them to assist their customers in getting the desired solution.  The reseller market is always challenged with providing a solution that meets the customer’s budget, and customers being customers always have one-tenth of a budget that is required. So by using our services, it’s an alternative to offer their customers.
VL: Resellers typically haven’t had what we believe is an adequate financing service to help support their client requirements in the area of $20,000 to $150,000 in invoice size. Historically, that size of the market hasn’t been services well from a financing perspective, to make it easier for the reseller to deal in that dollar size transaction when they’re engaging with their customers.

PB: What type of IT business do you foresee benefiting from your service?
VL: In that space, it would be business from ten to 100 seats with the earlier mentioned dollar range of $20,000 to $150,000. It doesn’t mean that we can’t do the other, but it’s certainly that area that we’re targeting. We’re very much open-ended and there reseller clients base itself will be our client base.

PB: What are your growth plans?
BM: It would be difficult to quantify in a dollar sense, but in terms of what we would see as our success, but in terms of what we would see as our success, I would see having a product that is well accepted by the market, that is typically being used by our target market and a high degree of activity in that space. We are confident we will achieve that because of the research we’ve done and discussions we’ve had with a large number of resellers, who have indicated that there is a need for the product. However, it is a bit difficult to say what dollar number we hope to achieve, because we don’t know what the lending amount is going to be.
VL: Some of the initial marketing we have done into this segment reflects that there are a good percentage of the resellers that see a real place for our offering. The ones we have talked to directly have also said as much.

PB: What advice do you have to businesses about IT budgets:
VL: They should look to acquire the ‘real’ solution that they need is for their business. In other words. Don’t restrict yourself on cost because of that ultimate dollar size. Get a right solution for your business, whatever it might be, and include whatever equipment that may be. Through the FinleaseIT program, we can actually make that easier by breaking that into monthly payments and look at it from that perspective. Often companies will take the other view and say that they only want to spend a certain amount, and by doing so they won’t get the real solution that they need and end up spending more in 12 or 24 months time.