HPE pours $2B in customer financing as COVID-19 impacts cash flow
Hewlett Packard Enterprise (HPE) tackles pandemic conditions with new partner and customer relief initiatives with a package in financing about US$2 billion to help customers overcome cash flow and liquidity crunch related to Covid-19, forming part of a global stimulus package.
It will get disbursed by HPE Financial Services - the Payment Relief Program is designed to help customers acquire new technology while alleviating financial strain, through deferred payment plans and buy-back initiatives.
Specifically, the multibillion-dollar pledge in financing will be applied to ensure the business continuity and operations at the customer level, in addition to “converting IT infrastructure into new sources of capital,” according to Antonio Neri, President and CEO of HPE.
The move comes amid rising concern within the channel across Asia Pacific that financially challenged customers continue to severely impact the ecosystem. As revealed via a special report - Protecting partners during Covid-19 - tier-2 providers are especially at risk as end-users struggle to meet payment terms, placing enormous strain on the supply chain.
“We are all seeing the global impact of the Covid-19 pandemic grow each day,” said Antonio Neri. “We are doing everything we can to address the needs and concerns of our customers and partners.”
According to Neri, the vendor is “actively working” to mitigate such impact from an operational perspective, with a particular focus on streamlining distribution through the channel.
“Long before Covid-19, we took steps to diversify our supply chain and we are working closely with more than 200 suppliers to optimise how we build and distribute our products,” Neri added. “Our response framework focuses on assessing developments, addressing the needs of our people and business operations, and adapting our business activities to help the world tackle this crisis.”
The financing will be applied to ensure the continuity of business operations at customer level, in addition to “converting IT infrastructure into new sources of capital”.
Customers can also acquire new technology and pay one per cent of the total contract value each month for the first eight months, deferring over 90 per cent of the cost until 2021. According to HPE, beginning in 2021, each monthly payment would equal approximately 3.3 per cent of total contract value.
“This is a challenging time to lead a business,” added Irv Rothman, President and CEO of HPE Financial Services. “Today more than ever, IT leaders and CFOs play a central role in ensuring financial health while continuing operations.”
HP also offers short-term, market and country-specific incentives for partners in a bid to help businesses in the channel navigate rocky market conditions resulting from the ongoing coronavirus pandemic.
The initiatives, which span global commercial and retail channel partners across personal systems and print, will vary by geography and are dependent on partner eligibility.
The actions taken by HP include the provision of a variety of financing and leasing options for end customers. Specifically, in partnership with its finance partners, HP’s Integrated Financial Solutions group is now offering a variety of financial and asset lifecycle options, including deferred or reduced payments until 2021.
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