Twelve pence in every 1 borrowed to finance IT purchases & leases is needlessly wasted on admin costs, charges and inflated interest rates.
Poor IT financing costs Yorkshire and Humberside businesses more than 720,000 every working week. For every 1 borrowed to finance IT purchases and leases, 12pence is needlessly wasted on admin costs, charges and paying higher than necessary interest rates.
If businesses in Yorkshire and Humberside cut out the broker middleman and source IT finance via independent online marketplaces they could collectively increase their IT spending power by 36million a year - enough money to purchase 103,374 laptops, which would stack almost 25 times the height of the Humber Bridge.
These are the headline findings of research conducted by financial analysts at Smartfundit.com.
Using proprietary data as well as government and industry statistics, Smartfundit.com modelled the various costs involved in sourcing IT finance, including:
- Executive and administrative time
- Office costs and legal representation
- Broker fees
- Finance provider charges
- Higher interest rates
The costs for three different scenarios - sourcing finance via a broker, via a technology vendor and direct with finance providers - were then compared against sourcing via an online IT finance marketplace to reveal the 'cost of poor IT financing'.
"Sourcing specialist IT finance can be a complex task, made all the more difficult by the lack of transparent advice and information. Unsurprisingly then, businesses are falling foul of hidden costs and are unlikely to get the best deal possible," said Suki Gallagher, CEO of Smartfundit.com. "Our research underscores the financial imperative for looking at alternative ways of sourcing finance, such as letting finance providers bid for your businesses online. It's about time businesses took back control and turned IT financing into a borrowers' market."
The table below shows the cost of poor IT financing in the UK:
England - 425,733,138
Wales - 19,275,513
Scotland - 40,085,199
Northern Ireland - 11,255,523
Smartfundit.com means finance on demandtm for the world's technology through an independent, open platform that brings finance providers, technology vendors and businesses together. The site cuts out the middleman and provides a fast, easy and secure way for companies to source flexible IT leasing finance. Since launching in January 2006, Smartfundit.com has been used in the funding of technology purchases totalling more than 250million ($500million).
Smartfundit.com subscribers range from small to large companies including blue-chip technology vendors such as Oracle, Microsoft, Readsoft, Computer Services Group, Infor: K3, Morse and Torex, and end-customers such as Barclays, Institute of Payroll & Pensions Management, British Nuclear Group, Spinvox and Trutex.
The company is privately held and is headquartered in the UK with offices in San Francisco, USA.