No hidden costs or liabilities’ as new ICT focused finance company is established
Identifying a niche in capital funding for the ICT industry channel, Bruce McDonald, former regional executive at distribution house Axiz has established Genuity Finance.
In partnership with Paul Alcock whose financial background includes Investec and the United Bank of Switzerland the new entrepreneurship is focusing on various flavours of asset financing.
“Research in the US has shown that more equipment is financed through leasing than bank loans or private equity whilst in the UK approximately one third of capital expenditure is done through leasing. In the South African ICT market we are relatively under-traded in terms of asset finance with a much smaller share of the total market currently being financed,” says McDonald.
He believes the reason for this is a more conservative buying mentality combined with a lack of awareness around the potential operating benefits derived from financing. Moreover companies are reticent about applying for finance because this sector in the past has been plagued by hidden costs and contractual liability.
Genuity Finance aims to remove the myths and, with McDonald’s expertise and relationships in the channel complemented by Alcock’s financial and risk management acumen, they are well positioned to make an impact. With Axiz endorsing the company and referring business this position is further strengthened.
“We have been in business for a few months in KwaZulu-Natal and are taking an innovative portfolio of capital funding products and services to the ICT channel. This includes equipment leasing, asset-based and working capital finance as well as leveraged capital solutions.
“Tailor-made leasing is offered across all asset classes ranging from computer hardware to office automation, telecoms, security/surveillance, machinery, satellites as well as software.,” says McDonald
Other forms of customised structured financing will be made available on demand. Genuity has strategic relations with leading financial intermediaries and insurance companies who have acknowledged the opportunity and bought into the vision in support of this offering. “
McDonald says asset finance benefits the ICT channel by improving cash flow and reducing trade risk as well as leveraging a tax base, better capital preservation (off balance sheet funding) and mitigating obsolescence risk for the end customers. Genuity can also assist with budgeting and other financial issues
Going forward the duo is talking to other vendor partners such as HP, Microsoft and Lexmark with the intention of expanding the business on a national scale. They selected KZN first as they both know the area well and want to ensure the business is geared to service and deliver well and as such be accountable for the customer experience country-wide.
“Our intention is to hand pick partners in each of the major cities and come alongside them as an outsource finance partner offering a clear value proposition around Genuitys’ arsenal of products. As Genuity does not supply or service any equipment, there is no conflict of interest with the ICT channel and the finance and insurance product will simply compliment the reseller’s solution offering to the market.
“The intention is to work with the channel tailoring financial solutions withthe equipment suppliers transparently taking away the fears and hesitations of hidden costs.
“We have seen the demand and the timing is right to bring a fresh and well constructed finance option to the table to facilitate and structure the healthy supply of ICT and related equipment,” says McDonald
Genuity Finance supports the NCA and its mandate to encourage responsible lending and as such all contracts are NCA compliant. Genuity is also a Level 4 BEE accredited business focused on employment creation and SMME development.