November 11, 2008, 10:41 AM — Smaller resellers may start having a hard time finding the credit they need to stay in business. IBM Global Financing, and De Lage landen Financial Services, have both discontinued their credit programs for solution providers. Although distributors still seem to be offering credit, VARs should be wary of placing all of their credit hopes on the credit line of a single distributor. However, third-party credit will continue to be hard to come by, and so many VARs are finding themselves in a pinch to obtain credit.
It's a regrettable situation that the consequences of the credit crunch will fall disproportionately to smaller VARs, some of whom may not survive the recession. While the government is bailing out huge banks and mortgage lenders and the auto industry, small businesses are left to fend for themselves--an unfortunate situation indeed, since it is small business, and not the current recipients of government corporate handouts, that make up the backbone of the American economy.
