As the Federal Reserve Bank was raising interest rates last July, IBM increased its financing rates by one percent on the Low-Rate Financing deal. The on-again, off-again deal allows companies buying from $25,000 to $1 million in gear to get financing for low rates (at least by IBM’s standards); customers buying pSeries products can get the low rates on deals as large as $2 million.
IBM’s best rate last summer was four percent for iSeries, pSeries, zSeries, and xSeries servers and their associated storage, up from three percent in May 2004. That rate is now 3.85%. This time last year, IBM was charging 3.25%, and even pSeries deals had a $1 million cap. If you read the fine print, you’ll find these rates are only offered for qualified customers (meaning those with decent credit and solid financials), and they are only available on capital leases with a 24-to-36-month term with a $1 end-of-lease payout.
The interest rates IBM charges for PCs is 4.3%, and the company is charging 4.1% for any software sold under a one-time-charge licensing option and for various services from its Business Consulting Services unit. Financing for IBM’s Integrated Technology Services products (this is systems integration, as opposed to business process engineering work) has been given a financing rate of 4.5%.
