A great finance deal with Dell
There are many good reasons to buy Dell technology: it’s superior quality, its reliable and backed by an effective services infrastructure – and customers can get great financing that could end up actually saving them money.
Bianca Watson, who heads up Dell Financial Services in South Africa, says the company offers companies buying Dell technology an operating lease.
“What this means is that there is a residual investment from us – we finance the capital less the residual value, so the effective interest rate is below prime. This is a really good deal; even the blue chips don’t get below prime.
“But Dell assets are good assets so we can take a risk on them, and get good prices for them in the second-user market.”
The difference between DFS financing and regular lease is that ownership of the asset doesn’t revert to the client at the end of the term.
“And it means that we actually come out cheaper than using cash.”
This way, DFS becomes invested in the transaction, in partnership with resellers and customers.
Watson points out that there are numerous benefits for customers:
- It prevents technology obsolescence – customers have all got a lot of old computers and laptops that they cannot afford to upgrade, or that they haven’t got around to. The DFS lease facilitates the purchase at a lower cost, and allows them to buy outside of capex.
- Operational efficiency – lets DFS take old assets, give them an offer, and help them move to new technology.
- Capital conservation and credit line preservation – by providing financing, DFS allows customers to focus more on investing in their business, not in the infrastructure to run it. They can buy a lot more on opex than capex for the same amount and get the technology they really want. A lot of customers have got limited credit and, using DFS, they can preserve their existing credit lines.
- Cash flow management – DFS can structure a cash flow that matches the customers income since there is no deposit and no capital outlay.
- Lower total cost of ownership (TCO – leasing facilitates a three-year technology rotation which reduces TCO by minimising support costs.
- Total financial solution – DFS can finance entire solutions, including IAS 17 requirements, and compliant on and off balance sheet finance for clients.
For reseller partners, there is also a host of benefits:
- It’s easier to close a deal, and providing a complete solution to your customers’ needs, so you can close the deal quicker.
- By organising finance, resellers can protect their margins.
- There’s an opportunity to upsell.
- Customer retention is easier because the customer is on DFS’s books for three years – and the company will remind the reseller with the customer is ready for a refresh.
While customers can actually save money by financing their equipment through DFS, resellers can also maximise their profitability. The service offers quick credit decisions and the ability to access funding through various channels. This means there is more cash available, more quickly.
Plus, a contract management solution can be added to the financing deal, making is possible to track assets.
For resellers, it’s good news the DFS interacts directly with the customer, which takes a lot of the hassle out of administrative issues.
“It’s a simple transaction for the reseller partners, Watson says “DFS pays out the invoice as soon as the products are installed.”
But the DFS service goes beyond financing. It also looks at asset management and the whole asset lifecycle, including acquisition, warranty, insurance, upgrades, technology refresh, lease and contract management, asset management, asset tracking and disposal.
“We are looking to partner with the channel more effectively,” Watson says. “We can finance software; and we can do services financing. And we are looking to package various solutions for different products. Plus, in the next few months we will roll out an online calculator that you can use to get a good guideline.”