Cash Rich Tech Companies Becoming Banks?
from the here,-borrow-some-money dept
What we didn't necessarily count on was that cash rich tech companies might go in the other direction -- and look to fill that opportunity to lend where banks had failed. Apparently vendor financing is suddenly a very hot business, with various tech companies suddenly finding a lot more interest in their leasing and vendor financing programs. Effectively, what's happening is that these tech firms with money are taking over the role of lenders from the banks. Assuming the loan risks are low, this could actually work out quite well for these tech companies in the long run. It's at least something worth watching. Valleywag worries that these sorts of deals almost always end badly -- but that's not necessarily true. It really depends on how the programs are run, and how well they measure the risk associated with certain companies.