__p It’s a catch-22 situation right now. Banks have the funds to disburse, but few takers. Channel partners need the funds but there are few to give it. Credit is what drives the IT distribution business. And yet it is the hardest to come by.
p____p To increase their credit-worthiness channel partners have to streamline a few processes. Firstly, partners should be convincing. Bankers are concerned that the monies go into paying back overdue loans and not for the purpose it is being sought for.
p____p Technology is a risky business in itself. Products get obsolete within six months. That itself is a worrying factor to those not familiar with the business. Therefore it is even more vital for partners to be able to understand the technology they are currently peddling in order to be able to convince the moneylenders of its market.
p____p Partners should also learn to differentiate between unnecessary risk and calculated risk. A leading distributor once told me that distribution is all about rolling the money and managing inventories. If a partner gets this
formulae right he is home safe.
p____p Unfortunately, it takes a lot of missus and minuses to get the correct balance. But it also does not take a genius to figure out when a credit period is being stretched thin. Unnecessary risks lead to bankrupt business. Not a scenario that most partners would want to find themselves in.
p____p A more flexible attitude also would go long way in making the lender more comfortable with the partner. Most channel players are wary of opening their books to third-party auditors. Acting suspicious or reluctant only leads to more doubts.
p____p What is often forgotten is that these are accepted norms of practices in most other business. If the rules are followed partners will find more funds coming their way than they would probably require. Now thats a situation most of us could easily live with!