By Marcelo Lema
According to the World Economic Forum’s Financial Development Report, more than 90 percent of the countries surveyed said they have not returned to economic pre-crisis levels in terms of their access to capital. This access has been one issue preventing a return to prosperity, at least in the U.S. and China. A National Small Business Association survey indicates that cash flow issues continue to plague a significant number ofAmerica’s small businesses. Among the findings: nearly half of small-business owners report they needed funds at one point in the last four years and were unable to find willing sources.
Meanwhile, in China, Premier Wen Jiabao recently said that banks should prioritize credit support for small businesses and that SMBs should begin to receive preferential tax policies to help foster their growth.
With this environment as a backdrop, IBM Global Financing last year made $1 billion available to IBM Business Partners, who primarily serve SMB clients. The funding was to be spread over an 18-month period, however, it was used up within 12 months, underscoring the SMB’s appetite for capital. To continue the momentum, we recently made $4 billion more available to assist small and medium businesses in their pursuit of new technologies and innovation.
One example of a small business that leveraged new access to funding to fuel growth is Bishop Company, of Whittier, California. This 15-employee tools and equipment distributor serves authorized retailers across the country. With stagnating online sales and a lagging economy, Bishop Company needed to create a stronger online presence to deliver a shopping experience to meet the needs of a younger generation of sophisticated consumers. Working with IBM Business Partner Zobrist Consulting Group, Bishop was able to secure IBM Global Financing within minutes. The online retailer was then able to create a robust site that has become the driving force in its growth and has helped it increase sales by 200 percent.
Bishop found success through technology financing. I urge other established institutions to do the same. When SMBs benefit from financing, technology and growth, we all do.