Too Big To Finance? No Way!

posted by Wil Meggers on Monday, July 04, 2016 in Unified Communications and IT Blog

I’d be surprised if you hadn’t heard last month Microsoft bought out LinkedIn, but you may have missed the fact that Microsoft is borrowing money to pay for the transaction despite having $100 billion in cash and other liquid assets on hand.

Microsoft isn’t the first tech giant to creatively use financing, and won’t be the last. Back in February, Apple did pretty much the same thing while sitting on a stockpile of cash that - at the time - totaled more than $200 billion.

There are two key takeaways from these two instances of financing being used.

Key Takeaway #1: Don’t Assume Your Customers Don’t Need Financing

Most companies use financing; companies of all shapes and sizes use financing. Big companies, small companies, wealthy companies and cash-strapped companies use financing.  In fact, according to the ELFA 72% of U.S. businesses use some variation of financing. The next key is to figure out why (see Key Takeaway #2).

Don’t assume they don’t need financing. Instead, always include a monthly payment option as an alternative to eating up a huge chunk of capital.

Key Takeaway #2: Understand Why Customers Use Financing

According to Bloomberg, "by borrowing, Microsoft will not have to pay a 35% tax rate to repatriate cash from overseas accounts while also cutting down its future US tax bill by deducting interest payments".

Some companies are looking for tax breaks. Others want a predictable budget. Some companies just want to avoid ownership risks of things like technology.

By quoting a monthly payment you’re in a better position to address the customer’s needs.  Maybe to fit budget, get what they actually need, or avoid taxes.

When you combine Key Takeaway #1 and Key Takeaway #2 you become more than just a salesperson, you transform into a Trusted Advisor. How do you do that? Simply add a monthly payment option on every proposal and be sure to talk about it with your potential customers.

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About The Author

Wil Meggers, Vice President and General Manager, is responsible for providing unified, strategic leadership for the sales processes in the Unified Communications and IT group’s internal business teams.  

Prior to joining GreatAmerica in 2004, Wil was an independently licensed insurance agent for the Eastern Iowa region.Wil joined GreatAmerica as a Vendor Relationship Manager for the East Atlantic Region. Wil has also served as the Sales Director for the Southeast and Northeast Territories of the office equipment group, focusing on the training and development of the internal sales staff.

Wil received a B.A. degree in Computer Science from the University of Iowa.

  1. financing
  2. monthly payment
  3. quoting
  4. tax
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