“Financing with Cisco Capital has been a very smooth process,” says Rob Gill, Managing Director, Turnstone Limited, an Auckland-based IT firm.
Founded in 2005 in New Zealand, Turnstone builds and manages voice, video, and data networks for customers around the country using its shared IP network.
The company also provides managed ICT services, including cloud-based services, priding itself on being a Cisco Partner while striving to deliver high-quality customer service in line with its motto ‘Technology made simple.’
With a total of eight employees serving small and medium-sized businesses across New Zealand and Australia, Turnstone needed to refresh its IP network infrastructure as a result of business growth.
With the business previously funding infrastructure purchases primarily using cash, Gill wanted to consider options for preserving internal funds and more effectively managing cash flow to better support the growth of the business.
In essence, the company needed flexible, competitive financing that would cover the entire network infrastructure, including Cisco and non-Cisco equipment – and preferably not affect Turnstone’s credit rating.
Turnstone evaluated several funding options including bank lending, but approached Cisco Capital after attending a Cisco Partner conference.
Cisco Capital worked with Turnstone to understand the company’s technology strategy and project objectives, then proposed a three-year full-payout finance lease through a sale and leaseback arrangement.
Cisco Capital was able to structure a finance arrangement that had no impact on Turnstone's credit rating or available credit lines with its existing banks.
“Cisco Capital gives us a long-term source of finance, whereas if we went with a bank, we’d probably end up with either short-term financing or onerous conditions attached to a longer-term alternative,” Gill says.
“It means we can accurately plan for the next three years of cash flow and manage our budgets more effectively.
"By taking a longer-term, more strategic approach to technology acquisition, we will be able to maintain our competitive edge."
The financing agreement also strengthened the relationship between Cisco and Turnstone, helping the companies build a productive and mutually beneficial partnership.