Vendors urged to plug SME credit gap

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Vendors urged to plug SME credit gap

Microscope contributor

Vendors will need to step in to provide finance for SMEs as credit becomes harder to get hold of for smaller companies.

That assessment has come from analyst house Ovum, which believes that there is an opportunity for vendors to fill a gap left as some traditional sources of finance dry up.

Describing the situation from a software vendor point of view, David Mitchell, senior vice president of IT research at Ovum, said that more action was required to unblock customer orders.

“The economic climate is making customers more reluctant than before to have large up-front expenditure on new software and hardware,”he said.

“Software vendors must make significant changes to their sales tactics. Rather than focusing on selling based on return on investment,they must move their focus to the impact on time to break even and cash flow for their clients. Sales staff must refresh their skills in finance-based selling,” he added.

Towards the end of last year there was a concerted push by some of the largest vendors in the industry to promote their financial offerings to the channel, including Cisco, Microsoft and Hewlett-Packard.

One source said that the level of uninsured credit floating around the channel was becoming dangerously high and there was a requirement for those with sound financials to get involved with supporting the market.


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