Channel finance newcomer Moneytech this week commenced trials of its DealerCard product, providing resellers and distributors with low hassle credit lines.
Moneytech marketing director Sonja Menezes said that 50 DealerCard cards had been issued nationally and that the company hoped to gather valuable data over the next six to 12 weeks to further fine-tune the system as it grows.
The card includes 30-day interest free terms followed by an unsecured interest rate of 17.5 percent, although payments made within 60 days are only hit for 8.75 percent. Secured customer rates are yet to be decided.
Menezes provided bullish projections as to how fast this would occur, citing a 2003 Australian Bureau of Statistics report which estimated that the total IT channel has a value of $33 billion, with the segment between resellers and distribution at around $16 billion.
“If we picked up even 10 percent of that we’d be going exceedingly well.”
Moneytech hoped to have around 2500 DealerCard members in the next 12 months. So far 22 distributors have signed up, with five of the top 10 having committed in some way.
This is in addition to the 300 existing and 500 pending DealerCard Express members, who have access to a range of incentive programs but do not have credit privileges.
Credit applications for DealerCard have ranged from $50,000 to $100,000. More than 500 dealers have so far applied.
“We have been getting excellent feedback -- educating and telling the channel about Moneytech,” Menezes said.
“We essentially take the credit risk away from the resellers -- it leaves them with the potential to reduce their insurance costs.”
Tacked on to the DealerCard program in March this year was the RentCard product designed to give resellers a simple, online alternative to companies such as FlexiRent.
Moneytech says that it has so far racked up around $500,000 in business for RentCard alone, which allows resellers to process and approve lease applications virtually on the spot.
Menezes said that total IT channel market could be as many as 14,000 if you include regular buyers such as students, but that more realistically the pie was about 4000 buyers.
Based on current performance, Moneytech expects to have established a firm, unrivalled presence in the IT marketplace within the next 12 months, at which point it will look at emulating the system for the building, pharmaceutical, liquor and other industries.
“We are looking very seriously at moving into other areas, although we are focused on getting it right in the IT industry first,” Menezes said.
“We anticipate that’s probably going to start occurring by the end of the first 12 months.”