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Scottish firms waste £40m a year on poor IT financing
01/07/07
12 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 Scottish businesses more than £800,000 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 Scotland cut out the broker middleman and source IT
finance via independent online marketplaces they could collectively
increase their IT spending power by £40million a year - enough money
to purchase 121,840 PCs, which would stack almost 35 times the
height of the Forth Road 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
Nick Gibson, editor
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2007
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