MB Technologies has launched a financial services business aimed at the specific needs of the reseller channel.
Channel Capital will provide financial products, services and assistance to the company`s partner base, starting with a roll-out to its top tier resellers. MD Ron Keschner says the dealer base is still feeling the effects of the collapse of the Siltek Group, in October 2001.
"Approximately R1 billion worth of credit was taken out of the channel then and it hasn`t been put back," said Keschner. "As a result, dealers have been forced to partner with financial providers which are unsympathetic to the unique needs of the technology reseller.
"Channel Capital is uniquely positioned to provide assistance to the South African reseller community because it has been designed by channel players for channel players."
The cost of money, long sales cycles, the need for upfront finance to purchase hardware from a distributor, slow-paying customers and the habit of financial partners to go to the channel`s customers directly have all put enormous pressure on resellers, says Keschner.
"You need financial backing for the bigger deals, and resellers have been unable to obtain financing in order to grow beyond a certain size. Because we don`t deal directly with customers, if our dealer base feels the pinch, we feel the pinch."
Keschner says the company is already in a position to provide a comprehensive portfolio of financial products and services to MB`s partners, but the initial launch will be to Platinum and Gold PartneReward members.
"This is to ensure service excellence in the launch phase, but the objective is to roll out these services to the entire channel as soon as possible."
Although a number of channel players have their own financing organisations, they have not been able to leverage the economies of scale that Channel Capital is offering, says director Dino Kondos.
MB Technologies CEO Bruce McGregor says the requirement for finance in the channel has grown exponentially, with the growth in demand for technology across all sectors of the economy.
"Our role as a value-added distributor is to facilitate business through the reseller channel and ever-increasing working capital requirements are a major constraint. Channel Capital has been in the making for some time, based on demand."
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