Syscap 'fills credit gap' with card offer

Leasing company Syscap has introduced a credit card for resellers and users, claiming that it will fill a credit gap left by distributors.

The 6.5 per cent rate Syscap will offer on the card, which it is launching on 26 January for IT purchases, is competitive with short-term bank loans. But other credit-card deals are available for IT purchases, such as a general purpose commercial credit card launched last week by Siemens Financial Services (SFS).

Philip White, sales director at Syscap, said: "The feedback I've had, which helped me make the decision to do this card, is that there is increasing pressure on resellers by distributors. Getting extended credit terms is increasingly difficult."

The terms will remain the same for six months, after which time Syscap will offer users a leasing deal. But resellers will be expected to settle their credit card debt in full as soon as they were paid by their customers.

"I expect after six months they will try to shift the reseller's customers onto a lease as well. That's the name of the game," said Simon Taylor, finance director at Reading-based reseller Sol-Tec.

"It's only those resellers who have extended their credit too far or are less credit-worthy that will be interested."

Alan Norton, channel manager at commercial credit reference agency Graydon, said the credit card is an "innovative idea".

But he said there are not lower levels of distribution credit. "Distribution is still the biggest source of commercial finance. The levels are there for those who stick to terms of trade," Norton added.

SFS is offering nought per cent interest for 56 days, then (as an introductory offer) 7.9 per cent interest for the subsequent six months, followed by a final rate of 17.9 per cent.

sara_driscoll@vnu.co.uk