Dell Spurs Sales by Lending to Hard-Hit Small Businesses
For years, Dell Inc. (DELL) has relied on sales to small businesses for a big chunk of its revenue. It sells more personal computers to small companies than any tech supplier. Now, it is offering more credit to spur small business purchases.
The financing strategy is showing promise. Its small-and-medium-business division posted a 10 percent gain in revenue in the company’s fiscal fourth quarter ended Jan. 29 from the same period last year, versus an 11 percent gain for the company as a whole. Operating-profit rose 17 percent from the same quarter last year to $282 million, surpassing the $281 million in operating profit from Dell’s large-business unit, which posted an 8.4 percent rise from last year.
The Round Rock, Texas, PC maker has spent the past year trying to stimulate spending by its small business customers. It has offered new financing arrangements to small businesses, including interest-free deals for some purchases of $25,000 or more. It even has offered free computers to some small-businesses that purchase other products. In some cases, Dell has offered discounted computers and services to companies that agree to appear in its advertisements.
