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Cisco to Provide $2.5 Billion in Financing for Customers

Cisco to Provide $2.5 Billion in Financing for Customers

(Bloomberg) -- Cisco Systems Inc., the biggest maker of computer-networking gear, said it will offer $2.5 billion in financing to customers, seeking to encourage them to keep buying equipment during the Covid-19 pandemic.

Some buyers of Cisco gear, services and software will be given a 90-day holiday on payments now, and then could defer 95% of the cost of what they purchase until January 2021, the San Jose, California-based company said Tuesday in a statement. All Cisco products are eligible for the program.

“Cisco’s customers and partners are under enormous pressure to keep their businesses connected while remaining productive and secure,” Chief Executive Officer Chuck Robbins said in the statement.

Robbins has already called on large companies to hold off on job cuts to lessen the immediate economic impact of efforts to fight the pandemic. The new Business Resiliency Program is the company turning to its strong balance sheet to help cushion any drop in investment in computer infrastructure, which could end up eroding Cisco’s revenue.

Cisco, which has annual sales of about $50 billion, ended the most recent quarter with cash and equivalents of $27.1 billion. That makes it one of the most cash-rich companies in technology.

As companies focus on preserving cash flow, “the Business Resiliency Program will help partners provide an additional solution to better serve customers, without any change to their own financial situation, in this challenging business environment,” Cisco said in the statement. “It will accelerate their sales cycles and allow partners to offer their customers payment solutions to better manage their cash flow.”

The program will be run by Cisco Capital, the company’s investment arm.

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