International Business Machines, the US based information technology giant, has announced that its financial services arm, IBM Global Financing, has signed a deal with Advanced Micro Devices (AMD) to provide factoring services to AMD’s distributors in an important economic development in China.
The company said that IBM Global Financing, the leasing and lending business arm of IBM, had received an exclusive contract from China’s Tianjin Government to provide accounts-receivable lending (factoring) services in the Tianjin Binhai New Area, which has been developed by the government to support to innovative businesses.
Mario Bernardis, general manager for worldwide commercial financing, IBM Global Financing said in a statement that “This new partnership with IBM Global Financing and the Tianjin Government will bring great benefits to businesses looking to speed up the conversion of their invoices to cash.”
IBM Global Financing provides financing, asset-recovery services and commercial financing to clients that are based in over 50 countries across the globe.
According to the financial deal between IBM Global Financing and AMD, IGF will factor AMD sales receivables in China by purchasing receivables resulting from sales by AMD to its major technology distributors.
IGF China will pay AMD for products delivered to its distributor network and will provide distributors with flexible payment terms.
IBM is sitting on billions of dollars of cash and it seems a good idea to look for a better rate of return by themselves rather than waiting for the bank to bring in a comfortable return on investment. As we've suggested before, Cisco, Microsoft and Apple all have significant cash reserves.
(Wall Street Journal)