HP to offer small businesses zero percent financing 29 January, 2009 By Vanessa Ho

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Offered through HP Financial Services, the two promotions provide customers the choice to either lease or own products. The zero percent 12-month promotion plan allows small businesses to invest in new technology while managing cash flow. At the end of the 12-month term, the equipment can be purchased for one dollar. The zero percent 36-month lease offer provides a fair market value purchase option at the end of the lease term.

"It was an opportunity for us to help small businesses in some trying times and given the strength of our company, we are able to help facilitate purchases or leases of technology in an environment where many businesses don't have any other access or means to do so," said Brian Burch, director of SMB marketing with HP.

Both financing plans allow customers in the United States to finance between $1,500 and $150,000 worth of products from HP's broad portfolio. Canadian customers can finance from CDN$5,000 to CDN$150,000 worth of products. Available through April 30, 2009, in the United States and Canada, full details for both offers are available at www.hp.com/go/totalfinancing.

"History has shown that companies that continue to invest in their business during economic downturns are the leaders who emerge when times get better," stated Fred Bullock, vice-president, Marketing, Personal Systems Group -- Americas, HP. "These offers allow customers to invest in technology that can grow their business while minding their budget and freeing up capital."

Burch added that the zero percent financing promotion is about helping companies that need technology now, get that technology when it can do the most for them.

For HP partners, a company spokesperson said the new zero percent financing provided by HP Financial Services gives them a variety of tools to help their customers finance purchases. By helping to finance deals, partners can enable their customers to get the technology they need and help manage payments more efficiently, while driving increased sales.

After the conclusion of the promotion period, Burch said that HP will review its success to determine whether or not to extend it.

Andy Woyzbun, lead analyst with Info-Tech Research Group, said that HP's zero per-cent financing promotions provide customers different options for getting IT equipment and may make HP a more interesting competitor, but added that if there wasn't an economic crisis right now, HP wouldn't be offering such financing.

"What the financial crunch has done is slow down the purchase of [IT] equipment in general," said Woyzbun. "[HP is] not [offering these zero percent financing promotions] for the good of the public but to maintain their volume of sales to get a bigger percentage of a shrinking market."

He added that the financing promotions are one way to make their products appear more financially attractive to customers rather than them having to reduce their prices.

While HP's financing promotions can look attractive to small businesses, Woyzbun advised that companies need to take a look at the total cost of ownership of the equipment, as competitors might offer it at a cheaper price offsetting the savings made by financing it with HP.

However, if HP starts getting differential market share, expect Dell and Lenovo to copy HP to also maintain their share of a shrinking market, said Woyzbun.