Businesses in Northern Ireland are wasting up to a quarter of a million pounds a week on poor IT financing deals, according to research released on Tuesday.
The unnecessary costs work out at approximately £0.12 in every pound borrowed to purchase or lease IT products and services, or £11.3m (around €16.8m) per year in total. These wasteful costs comprise mainly administration charges and inflated interest rates, the new study said.
The research was carried out by financial analysts at Smartfundit.com, an IT finance portal. Using proprietary data as well as government and industry statistics, analysts modelled the various costs involved in sourcing IT finance. These include executive and administrative time, office costs and legal representation, broker fees, finance provider charges and interest rates.
The costs for three different scenarios - sourcing finance via a broker, via a technology vendor and direct with finance providers - were then compared with sourcing via an online IT finance marketplace.
"A lack of transparent advice and information means businesses are falling foul of hidden costs and are unlikely to get the best deal possible," said Suki Gallagher, CEO of Smartfundit. "It's about time businesses took back control and turned IT financing into a borrowers' market."
The Smartfundit survey looked at the UK as a whole and found similar patterns of unnecessary finance costs elsewhere. The combined figure for England was £425.7m, the study said, while Welsh and Scottish businesses were wasting £40m and £19.3m respectively on poor IT finance deals.
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