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Microsoft Financing To Expand in 2008

The economy is top of mind for most people right now. Because of that, we're dedicating a significant portion of the May print issue of Redmond Channel Partner magazine to practical tips for continuing to wring money from a weak economy into the bucket of your business.

One of the things partners told us as we reported the story was that they're looking harder at Microsoft Financing to help close deals as the economy sags. Well, there was some good news from Microsoft on that front in The Wall Street Journal on Wednesday. (Click here. Requires paid subscription.)

Not only are partners thinking about relying more heavily on financing, but Microsoft is thinking about it, too. While many lenders are short of credit and some major tech firms, notably Dell Inc., are considering selling off their financing arms, according to the Journal, Microsoft is going full-steam ahead. The company issued $780 million in loans in 2007 and expects to increase that to $1.25 billion in 2008.

"The decision to do all this was tied to the macro situation," Brian Madison, general manager of Microsoft Financing, told the Journal.

Actually, Madison has been talking aggressively about growing Microsoft Financing for years. When RCP talked to him at the Worldwide Partner Conference in 2006, he was hoping to double the portfolio that year from $500 million to $1 billion. But the key here is that Microsoft is publicly looking to ramp up this valuable closing tool, not scale it back. In tough economic times, Microsoft Financing can be a lifeboat.

For those Microsoft partners who haven't used Microsoft Financing, it works like this: You make the sale and turn the deal over to Microsoft Financing. Once Microsoft approves the customer's credit, Microsoft cuts you a check for 100 percent of the software, hardware and services cost -- up front -- and starts billing the customer in affordable monthly chunks. Get the details here.

Posted by Scott Bekker on April 17, 2008


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