And the winner is…

After 64 matches, the Syscap Summer of Soccer game has reached its dramatic conclusion.

There have been early exits and eye watering injuries; plenty of thrills and a few goal mouth spills but most of all there have been plenty of shots on target.

Syscap’s predictor game has been keenly fought and we are delighted to announce that the winner is…

James Baxter of Softcat who wins 4 Club Wembley tickets with hospitality.

The runners up are Ramesh Shrestha of Viglen and Tim Burrows of Softcat who take home an iPad mini and a meal for two at Cabana Brazilian Barbecue.

Well done to everyone who participated. We hope that you have enjoyed the Syscap Summer of Sport and we look forward to working with you again soon.

£1.7bn Support & Maintenance Market Funding For Resellers

Syscap is launching a new funding solution to allow resellers to unlock revenue from the UK’s £1.7 billion* IT support and maintenance market.

The new stand-alone online product, Support Funder, allows resellers to receive payment for an annual IT support and maintenance deal at the start of the contract, while clients spread the cost into simple monthly instalments.

Support Funder is already being used by several major Channel businesses, including Iris and Swiftpage. Syscap is also in negotiations with around 50 more IT resellers to use Support Funder.

Contracts for services including maintenance of equipment and software, helpdesk provision and staff training are potentially one of the most profitable parts of the market for IT resellers, although most have yet to tap its full revenue potential.

Until now no funding has been made available to help resellers access this market

Syscap explains that until now, no suitable funding was available to help resellers access this market due to the short-term nature of support contracts. For many IT resellers, this has led to difficulties in securing and maintaining support contracts, as the significant up-front expense involved has acted as a barrier to some clients.

Accepting monthly direct debit payments from clients has also not been a practical option for the majority of resellers, as arranging direct debits through a bank involves significant costs and administration work, and very few resellers are able to accept these payments directly.

Support Funder will provide payment up front to resellers for their support contracts, allowing them to focus on growing their businesses while it takes the administrative burden of collecting the monthly payments from their clients.

Philip White, CEO of Syscap, says: “Most resellers are still struggling to make the most of their capabilities in maintenance and support, and the lack of a suitable funding product has definitely left many of them unable to provide annual support contracts in the best way for their clients.”

“We think Support Funder can be the key that unlocks profits for resellers in this market.”

“Many resellers have told us that they could retain a much higher percentage of their support and maintenance clients if they had the ability to offer financing for the service. Syscap has a long history of providing bespoke funding to Channel businesses, so this product was a natural fit for both ourselves and our clients.”

Syscap plans to roll out the Support Funder model to other IT services in the coming months.

Says Philip White: “We believe that there is scope for this funding model to be applied to other services provided by Channel businesses, allowing resellers to offer a better deal to their clients.”

* Source: TechMarketView

IT Vendors Offering Finance To Customer To Convert Leads

New funding service for maintenance and support contracts expected to drive continued partnership growth

The number of IT vendors offering finance to potential customers to help convert business leads into sales is continuing to grow strongly, as securing bank lending for IT investment remains tough particularly for SMEs, says Syscap, the leading independent finance provider.

In the past year Syscap has seen a 19% jump in new partnership deals signed with IT resellers keen to offer a finance option to customers as part of their sales process. Syscap signed 350 partnership deals with IT vendors last year, up from 294 in the previous 12 months, continuing a strong upward trend over the past three years.

Comments Syscap Chief Executive Philip White, “In the last few years, the ability to offer finance to clients has become a crucial part of the sales process for many IT vendors, enabling them to maximise the number of enquiries and leads they can convert into actual business. From what we are seeing this trend shows no sign of abating.”

“While businesses’ desire and need to invest in IT may have returned since the recession, many SMEs in particular are still having trouble securing the funds to make the necessary upgrades to support their business growth and development. Bank loans, especially for IT investment, are still in short supply.”

“Providing asset finance is the obvious solution so that IT vendors can help put clients in a position where they can green-light investment projects that would otherwise have been out of reach.”

New funding service for maintenance and support contracts expected to drive continued partnership growth

The new stand-alone funding product, which is accessed completely online, enables more businesses to take up contracts for maintenance of IT equipment and software as well as for support such as help-desks and staff training.

Philip White says: “Maintenance and support contracts are valuable product for vendors, and help customers to get the most out of new IT acquisitions.  But businesses can be reluctant to pay for these contracts up front, and funding a monthly payment option themselves is not always attractive for vendors.”

“Vendors tell us that most businesses recognise that technology maintenance and support are desirable.  They know that they need help to make the most of the technology they are buying rather than just using the basic functionality, but unfortunately, there isn’t always a way to make this support immediately affordable for them.”

“With Support Funder, we are excited to be the first to fill that need, and to put this new service online so that it can be accessed instantly.  Providing targeted financing for maintenance and support products should help to grow what is already a very important market for vendors.”

Support Funder is based on proven technology and processes used successfully for two years as the Law Society’s recommended finance provider for regulatory fee renewals.

Funding for IT investment jumps 9% in a year

IT leasing bucking overall trend of asset finance industry

IT investment through leasing in the past year totaled £1.5 billion, up 9% on £1.37 billion in the previous year*. Many businesses cut back sharply on IT spending following the credit crunch, leaving Britain’s business IT infrastructure crumbling.

The growth in asset finance for IT investment halts the overall trend of business investment through asset finance, which contracted by 1.7% over the same period, going from £22 billion to £21.7 billion. This is partly due to the withdrawal of ING from the UK asset finance market in November 2012.

The main reasons for  the rise in IT investment by businesses is the boom in the use of cloud storage, the increasing number of companies supplying tablet computers to their employees, and even businesses switching to Windows 8.

Investment in IT has impact on economic growth

Philip White, CEO of Syscap, comments: “Investment in IT by British businesses can be a huge catalyst for economic growth. It has a massive impact on how efficient and globally competitive UK plc can be.”

“Cloud computing has completely changed the landscape of data storage globally. Businesses around the world have moved hundreds of thousands of terabytes of data out of in-house storage to the cloud over the past few years.”

“That has driven a huge increase in demand for storage at third-party data centres. A lot of these cloud providers are investing heavily in storage, networking and security, as their clients become more comfortable with the notion of remote storage, and more willing to put sensitive data in the hands of third party providers.”

“The penetration of tablets into the workplace has also been a major factor in the increase in IT investment. A massive number of employees across financial services, professional services and the technology sector are now given tablets by their employers to aid their productivity. This comes with a cost that some businesses are choosing to meet through asset finance.”

“Even Windows 8, despite a difficult first year in the market, has provided some impetus for businesses to invest in new IT equipment.”

Asset finance to invest in IT has grown in popularity

The use of asset finance to invest in IT hardware and software continues to grow in popularity as many banks remain unwilling to write business loans to fund IT investment.

Explains Philip White: “A lot of banks lack the specialist knowledge to assess the long-term value of IT assets, meaning they are often reluctant to write loans to fund them. This means a lot of businesses have found that asset finance is a much better fit for their programmes of investment, as the specialists in the sector have a much keener understanding of how to assess the risk in lending against IT hardware and software.”

“Leasing allows businesses to bring their IT equipment up to date without impacting on cash flow, or adding to the level of debt they carry on their balance sheets. This frees up cash for the other vital investments businesses will need to make as the economic recovery gathers pace.”

Asset finance for IT investment by UK business, last two years*

Asset finance for IT investment by UK business, last two years*

* Year end October 31. Source: FLA

Syscap raises £7,500 to help Breast Cancer Appeal in just 10 days

Syscap, the leading independent finance provider, has raised £7,500 for Breast Cancer Awareness’ ‘Wear it Pink’ day.Urging their colleagues to wear pink to work, the Syscap team raised £2,500 in just 10 days. This was possible thanks to the generosity of staff, partners and friends who contributed prizes and purchased tickets for the ‘Pink Raffle’. The amount raised will be trebled by the company’s charity arm, The Syscap Foundation, taking the donation to a grand total of £7,500.Cancer Research’s annual Wear it Pink day encourages friends and colleagues to join forces, have fun and wear something pink. The Syscap staff made a great effort, with flamboyant outfits and some very striking wigs.John Allbrook, Chairman of Syscap and Director of The Syscap Foundation says: “Breast cancer affects 1 in 8 women, and this year, over 50,000 women will be diagnosed with the disease.””We are big supporters of Breast Cancer Awareness, which does an amazing job in helping the sufferers and their families through often very difficult times, as well as helping women to spot the symptoms and get the early, critical diagnosis that could save their lives.””We were very pleased to have raised £7,500 to help them in their vital work.”The Syscap Foundation was established in 2007, with aim of supporting worthy local and national charities. For every business transactions made at Syscap £1 is donated to the Foundation.  Additional funds are raised internally through sponsored staff activities.News_20Nov_1

IT resellers continue to flock to financing

Syscap trebles number of new vendor partnerships in another consecutive year

The number of IT resellers using vendor finance to support their sales growth is continuing to increase, according to Syscap, the UK’s leading independent finance provider.

Syscap has seen this increased recognition of the importance of financing reflected in a near trebling of the number of new ‘Option One’ vendor partnerships it has signed in the last twelve months.  100 new Option One partnerships were signed in 2011, rising to 294 new partnerships during 2012.

Syscap explains that many IT vendors now see financing options as the most effective way to unlock sales, because SME lending by High Street banks remains subdued, whereas the independent financing industry has been successful in expanding its funding to businesses.

Syscap points out that the use of financing by businesses has grown by 5% over the last year. During 2012 the financing industry lent a total of £14 billion (excluding fleet purchases) to UK businesses.

Philip White, Chief Executive of Syscap, says: “Independent financing continues to grow while bank lending remains sluggish, so vendors have recognised that it represents their biggest opportunity for growth now, and for the foreseeable future.”

“Vendors are keen to work with us to embed finance into their sales processes and propositions and to make sure that they are using our flexible payment offerings as effectively as possible to help their customers make the technology investments they need.”

Syscap works alongside its Option One vendor partners to help them grow their sales, offering end to end finance packages, including administration and payment collection, as well as sales support material and advice.

It responded to increased vendor interest in financing by launching a substantial upgrade to the Option One online portal – Syscap Online – and to the Option One partnership programme in July 2011.

Syscap Online now includes an online ‘decision in principle’ system which enables resellers to know within seconds if their customers would qualify for financing. Other finance providers can take days to provide a quote.

When Syscap Online gives a ‘green light’ to a financing request, the instant response includes a ready-to-print finance quote, along with an analysis of the cost of the financing package compared with a cash purchase to help resellers to demonstrate to their customers the value that financing offers.

Philip White comments: “Vendors have responded really well to the online decision service because it takes the pain out of arranging finance for their customers. They know immediately if they can finance a technology purchase. This makes it much easier for them to make a positive decision than if they have to go off and research their options themselves. It also allows them to increase their business offerings by offering a viable payment solution”

“It has become an absolutely integral part of the way many of our Option One partners work.”

13% Jump In Use Of IT Leasing

IT vendors increasingly seeing asset finance as way to unlock sales

The use of asset finance to fund business investment in IT has jumped 13% in the past 12 months, as businesses embrace asset finance as an affordable way to make vital acquisitions and upgrades that would otherwise be out of reach, says Syscap, the leading independent finance provider.

According to figures from the Finance Leasing Association, the volume of asset finance used to acquire IT and software in the past year to April 2013 rose to £1.384 billion, compared with £1.227 billion in the previous 12 months. The jump follows a 15% increase on the year before that.

Syscap points out that this healthy growth comes at a time when bank lending continues to be tight. Recent Bank of England data shows that bank lending to UK businesses fell by nearly £3 billion in April alone, and £300 million less was lent under the Government’s flagship Funding for Lending Scheme in the last quarter.

Asset finance used to acquire IT and software

Asset finance used to acquire IT and software

Comments Syscap Chief Executive Philip White, “IT leasing is continuing to grow apace, as more and more vendors are seeing asset finance as an ideal way to secure sales which would otherwise stall given the continued reluctance of banks to lend, and businesses become increasingly comfortable with the concept.”

“Many companies that put investment plans on hold during the recession are now desperately in need of new equipment and upgrades or they risk losing their competitive edge.”

“Without the option of asset finance many firms, particularly SMEs, would really struggle to swallow the upfront costs of a major IT investment. Many simply wouldn’t be able to afford it at all. If that holds back business efficiency and innovation then of course that’s bad news for UK plc.”

Companies recognising that benefits go beyond providing basic funding solution

Philip White adds that with bank lending continuing to fall, leasing presents not only an accessible solution – but one which crucially also has many other benefits for businesses as well.

“What attracts many potential customers to leasing in the first place is that it provides a solution to the basic problem of funding. But what’s really boosting growth is that vendors are now successfully demonstrating that the advantages of asset finance go well beyond this,” he says. For example:

  • Stability of fixed instalments. Spreading the expenditure across fixed monthly payments helps to clarify budgets and contain costs, allowing the user to combine different IT requirements, for example hardware and software, in one package. It also enables companies to optimise cash flow and improve their bottom line by not having to add to the debt held on the balance sheet.
  • Facilitates long term planning. Many companies also like the fact that asset finance can help them to plan more easily for the long term too. While some forms of traditional bank lending, such as overdrafts and even long-term loans, can be withdrawn at any time, lease finance stays in place as long as the business is able to make its repayments.
  • Flexibility. Additional functionality such as new software or cloud computing is easy to bolt on as necessary as customers grow in size or expand into new areas so that vendors can always ensure they are providing the optimum service to customers.

Technology and the UK productivity gap

The most recent data from the ONS shows that employment levels are continuing to rise, while at the same time GDP is continuing to stutter, with the UK on the brink of an unprecedented triple dip recession.  These contradictory trends may be a result of past underinvestment in technology and equipment infrastructure by businesses, which raises important questions about both companies’ future investment plans, and how those plans can be funded.

The UK has a long-standing productivity gap with each worker responsible for less economic output than their German and other European cousins, but the gap is now widening to such an extent that economists are starting to refer to a ‘productivity puzzle’, and wondering what other factors are at play.

One possible culprit is the dramatic and prolonged decline in business investment.

Many businesses made steep cuts in spending in the wake of the financial crisis, and the UK manufacturing representative body the EEF estimates that UK business investment is now 15% below its pre-2008 levels, and lagging behind global competitors.

Fortunately the slump in investment is starting to reverse, with the first signs being a recent ONS report that spending on Research and Development (R&D) in the UK reached £17.6bn in 2011, an 8% increase on 2010.

Overall business investment increased by £1.1 billion in the final quarter of 2012, up by 3.8% compared to the previous quarter. However, growth in business investment over the course of 2013 is forecast by the ICAEW to fall by 0.9% in real terms.

Clearly, while the economic situation remains uncertain, businesses are still wary of investing significantly in their own growth, as owner managers and shareholders alike worry about the likely return on investment.

This hesitation has been exacerbated by a lack of affordable funding available  – high borrowing costs have made  investments less attractive for businesses. This has led to businesses missing out on new potential opportunities and many are struggling to remain competitive because of their underinvestment in new equipment and technologies.

An under-investment in technology may also be affecting businesses’ ability simply to keep pace with their pre-recession output.  Businesses which last made major investments in technological infrastructure in the 2008 period would now be reaching the end of the product’s lifecyle and will require updated technological infrastructure to remain competitive, and maximise output.

IT equipment resellers still note a resistance among businesses to commit to investments, however vendor specialist Syscap has seen that there is an increasingly strong underlying demand for new software and hardware. Businesses that have also been sitting out the last few rounds of technology development due to fear over the economic situation, are now keen to get up to date.

In particular, as confirmed by research by KPMG Global Pulse,   new reporting and analytics software are among the hottest must-haves at the moment, because organisations are concerned that they do not have the processes in place to handle a potential upturn in demand.  They hope that new reporting and analytics software will help them to make better business decisions faster.

So, what can be done to help convert this pent-up need for new investment into actual investment?

The Government is very aware of the need to encourage businesses to invest.  In the pre-budget statement they announced a temporary increase to the Annual Investment Allowance to £250,000 for two years.

That is a very useful step, though we would like to see the Chancellor encourage businesses to start developing long-term investment plans by keeping the Allowance’s ceiling at £250,000 permanently.  The evidence of the last couple of years during which it has been raised from £50,000 to £100,000, then reduced back to £25,000 suggests that short term incentives have had a reasonably limited impact on businesses’ spending plans.  Greater certainty over tax allowances will give businesses more time to develop major investment plans.

Business investment should also be on the agenda for the incoming Governor of the Bank of England.  Appearing before the Treasury Select Committee earlier in February, Mark Carney indicated that he would consider giving guidance on how long interest rates were likely to stay at their current ultra-low levels.  This is something that Syscap has been advocating for some time.  Greater certainty over the long-term cost of finance will certainly help to encourage businesses to invest.

Despite significant public money being put aside, for example through the Funding For Lending Scheme, and a major push to get banks to lend directly to businesses, we have not seen the volume of loans being distributed to small businesses recover.   In fact, last year, bank loans to businesses fell by 2.8%. This has led to many businesses pursuing other financially viable options to seek viable funding.

More and more companies are now relying on asset finance, including leasing, to invest in IT equipment. Over the last year, asset finance used by UK businesses investing in technology, such as IT and software, increased by 26% to over £1 billion.

The use of asset finance to invest in technology far exceeded the overall growth in asset finance, which increased by 3% over the same period.  This suggests that after a long period of underinvestment, technology is top of businesses’ shopping lists, and that companies are also choosing to fund their investment through asset finance

The reduction in reliance on bank funding by SMEs has resulted in some advantages for businesses that have sought out alternatives instead. Bank-provided lending instruments such as overdrafts can be discontinued at almost no notice, causing major cash flow issues for the business. Even long term loans can be withdrawn from businesses if the company’s turnover or profitability falls below a threshold set by the bank as a pre-condition of its lending. Lease finance, however, stays in place as long as the business is able to make its payments.

Additionally, because leasing does not affect a business’s other credit lines, it gives the company more scope to borrow money when it needs it in the future along with the opportunity to keep hard-won cash reserves for a rainy day.

These cash flow management advantages can make leasing a very attractive way to invest in new technology.  This is especially true for smaller businesses, as with a smaller number of customers, one late invoice can be more damaging.  This makes it especially important that small businesses considering a technology purchase understand the range of funding options available.

In our view this dramatic increase in businesses using asset finance to invest in technology is a positive development. Any sign that businesses are getting fresh finance to invest in IT hardware and software is very welcome. Leasing allows a business to invest in IT without reducing its vital cash facilities and without necessarily adding to the level of debt that a business carries on its balance sheet.

It may take years for the UK economy to fully recover from recent underinvestment, but the signs are that a recovery is starting to take shape. Businesses are increasingly aware that they cannot wait for bank lending to return to its pre-financial crisis levels.  Underinvestment has really started to hurt, and replacing outdated software and creaking hardware has become a priority for many businesses.

If the technology and financing industries can work together to help businesses to make their investment plans a reality, this could result in significant improvements to businesses’ and the nation’s output, giving economists one less ‘puzzle’ to worry about.

Bank Funding Replaced With Leasing For IT Equipment

IT investments vital to maintain UK’s competitive edge

UK business are increasingly replacing bank loans with asset finance as their preferred way to fund investment in IT equipment says Syscap, the independent finance provider for commercial, professions and public sector organisations.

Asset finance used by businesses to acquire IT and software jumped 26% to £1.344bn in the last 12 months, up from £1.069bn* last year.

Syscap says that the rapid growth in asset finance, including leasing, to fund IT investment is far outpacing the overall growth in asset finance which grew by 3% over the same period.

Asset finance is seen as an increasingly important source of funding since, for many businesses, as traditional lending has reduced significantly. Since the recession banks have been under pressure to rebuild their balance sheets to meet strict capital asset ratio requirements. More recently, some have had to absorb the cost of PPI misselling claims.

Overall lending by banks to UK businesses is continuing to fall – down by 2.8%** in the last 12 months.

Syscap Chief Executive Philip White comments: “Businesses have under-invested in IT equipment because of uncertainty in the economy and because bank funding for IT investment has been so hard to secure. Some banks have also been unwilling to lend money for IT solutions because they no longer have the specialist skills required to understand the risk and long-term value involved in lending against IT assets.”

“This lack of available bank liquidity for IT investment is even more worrying than the overall lack of business finance as IT investment is so vital in keeping UK businesses competitive on a global basis.”

“For businesses of all sizes IT investment is critical in driving efficiency, scaleability and growth. Many of the UK’s vitally important small to medium sized businesses are having to cope with IT infrastructure that is years older than it was originally intended to be.”

“Any signs that businesses are getting fresh finance to invest in hard IT hardware and software are very welcome.”

Despite the increase in leasing to fund IT equipment, Syscap admits it is concerned that even this good news may be dwarfed by the fall off in traditional bank lending for this kind of investment.

However, Philip White argues that a longer term rebalancing of business funding away from bank loans and towards asset finance could turn out to be positive. Philip explains that some traditional bank lending, such as overdrafts, can be discontinued at almost no notice. Even long-term loans can be withdrawn from businesses if the company’s turnover or profitability falls below a threshold set by the bank as a pre-condition of its lending. Lease finance, however, stays in place just as long as the business is able to make its payments.

Explains Phillip White: “Leasing allows a business to invest in IT without reducing its vital cash facilities and without necessarily adding to the level of debt that a business carries on its balance sheet. Because leasing does not affect a business’ other credit lines, the company concerned has more scope to borrow money when they need it in the future and the opportunity to keep their hard-won cash reserves for a rainy day.”

*Year to Sept 30th 2012, Source: FLA

** Bank of England, lending to private sector non-financial companies