sled fed credit presentation march 9, 2010 scott tillesen director of credit, smb accounts tech data...
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SLED FED Credit PresentationMarch 9, 2010
SLED FED Credit PresentationMarch 9, 2010
Scott TillesenDirector of Credit, SMB AccountsTech Data Corporation
Todd JordanRelationship ManagerGE Capital Solutions
Scott TillesenDirector of Credit, SMB AccountsTech Data Corporation
Todd JordanRelationship ManagerGE Capital Solutions
Tech Data Confidential2
Today’s Discussion Topic:
Financing Alternatives
Tech Data Confidential3
Financing Alternatives
• There are three general sources of business financing: – Suppliers: Credit limits and end-user payment alternatives
– Banks/Finance Companies: Inventory financing and end-user financing
– Shareholders: Personal guarantees and equity infusion
• As revenue grows there will be more assets such as inventory, accounts receivable, and equipment.
• Resellers need to plan how additional assets will be financed.
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Financing Sources Pie Chart
Bank Financing
Shareholder Financing
Vendor Financing
While there is no magic formula to say exactly in
what proportion each source of financing
should be, what is known is that successful
companies need all three sources to grow.
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Financing Source: Suppliers
• Maximize Credit Limits with Terms by:– Sharing Financial Statements– Having good industry payment record– Not having any reported liens, suits, or
judgments– Disclosing education and experience of
owners and operators– Providing a personal guaranty or security
interest– Providing a Stand By Letter of Credit (“SLOC”)– Communication
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Financing Source: End User Direct Payment
• Assign your accounts receivable to Tech Data via an Assignment of Proceeds (“AOP”).
• Tech Data provides the required wording for Reseller to put on their letterhead.
• Reseller signs the document as does the end-user.
• Provides end-user agreement to pay Tech Data directly.
• Great alternative for a specific large transactions or on an ongoing basis.
• Subject to the end-user being credit qualified.
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Financing Source:End User Lease Financing
• Reseller identifies end-user to leasing company.
• Leasing company approves and documents the deal.
• Leasing company pays Reseller and Tech Data.
• Tech Data Leasing Partners:
– CIT, HP Financial Services, IBM Global Finance, and others with prior approval.
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Financing Source:Additional Shareholder Investment
• Vendors compare the size of their investment to yours.
• They like to see that you have “skin in the game”.
• Credit managers like to see profits retained in the business.
• Quantify sources of additional shareholder investment.
• Every Fortune 500 company sought outside investors to enable their growth.
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Financing Source:Bank Line Financing
• Needed to meet overhead obligations.
• Sometimes needed to close the gap between accounts payable and accounts receivable.
• Keeps creditor happy at a minimal expense.
• Is used by every Fortune 500 company.
• Financing from Tech Data’s financial partners has advantages.
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Financing Source:Tech Data Financial Partners
1. Reseller applies and obtains a credit line with a Tech Data finance partner.
2. Reseller places order as usual with Tech Data.
3. Tech Data obtains electronic authorization from the finance partner and ships the order.
4. Finance partner pays Tech Data.
5. Reseller pays the finance partner.
6. Oh yes, this financing is FREE.
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Financing thru Tech Data Financial Partners
• Can be used in addition to your Tech Data open account.
• Free financing supported by Tech Data and certain product manufacturers.
- 30 to 60 day terms in most cases
• Tech Data Financing Company Partners:– GE Computer Distribution Finance – Castle Pines Capital– De Lage Landen– IBM Global Finance
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Financing of large purchase orders
Additional credit capacity for large contract orders
GE CDF Channel Finance Solutions
Gov. specific financing
Separate credit facility
S.T.A.R. – Receivables Fin.
Maximize cash-flow for growth…
Secured lending to Distributors and VARs to supplement operating capital requirements
Motivate distributors to stock deeper,
provide terms to resellers
Extended terms facilitating product movement through distribution channels
Financing over the water…
Importer terms supported by exporters, providing inventory for growth and seasonal demands
Sales SolutionsRevolving LinesSales Channel
FinanceImport Services
A/R Purchase Asset Based
Financing Direct Structures Indirect through
multi-tier distribution
No LOC or Advance Pay requirement
Reduce administrative cost
Providing innovative solutions to support the entire market channel, accelerate cash-conversion cycles, drive sales growth, and reduce associated
risk and administrative cost
Working Capital
Solutions
Inventory Financing
International Trade
Financing
Purchase Order
Financing
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Vendor Sponsored Programs
60 Days FREE Cisco
Symantec*
Sonicwall
McAffee ****
Fujitsu
HP **
Kaspersky ***
Lexmark
Sony VIAO
Tech Select Members – Gov/Edu Purchases
•45 Days FREE
Apple
Toshiba
Tech Data TechSelect Members
All other products get 30 Days FREE
* Limited to Symantec Silver partners.
** Subject to Tech Data approval, 60 day terms on select products
*** Limited to Silver and Gold Partner
**** Total Protection Suite products
Apply online today!!!!!
www.techdata.com/gefinancing
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Financing Sources:SuppliersEnd Users (AOP & Split Funded Leases)ShareholdersBank LinesTechnology Financing Companies
For more info visit: www.techdata.com/credit
Summary
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The Difference In Distribution
Scott TillesenDirector of Credit, SMB AccountsTech Data Corporation5350 Tech Data DriveMail Stop #A3-18Clearwater, Florida 33760
Direct phone: [email protected]/credit
Todd JordanTech Data Relationship ManagerGE Capital Solutions FinanceP: 800-237-8931 * 75697C: 727-480-5143E: [email protected]/gefinancing