Cisco today announced $2.5 billion in special financing in a bid to help businesses overcome the economic challenges brought on by COVID-19 and efforts to contain the spread of the virus.

The Business Resiliency Program, offered through Cisco Capital, will help mitigate the financial challenges presented by the virus and provide organizations the tools and equipment they need. At the core of the program is a recognition by Cisco that many businesses are grappling with slowing or stalled cash flow, as a result of efforts to curb the spread of the new coronavirus.

“Cisco understands that our customers and partners are under enormous pressure,” said Kristine Snow, SVP and president of Cisco Capital, in a statement. “Our goal is to make it easier for them to acquire the technology needed to keep their business running and productive.”

In an interview with SDxCentral, Oliver Tuszik, SVP global partner organization at Cisco, said it’s obvious that there's a downturn taking place in many core industries. “We know that IT technology infrastructure is the answer, so we need to ensure that our customers are able to invest even though they might have some cash flow constraints right now,” he said.

The program includes a 90-day payment holiday and allows customers to defer up to 95% of the cost of a new product or solution until January 2021. All Cisco appliances and software products, including services and up to 5% of partner provided services, such as installation, are eligible for the program.

The goal is to remove cash flow barriers and “allow big and small customers to invest in the IT infrastructure they need to survive and even grow in the next months and quarters,” Tuszik said.

The program won’t, however, help address customer's finance existing service contracts.

The program is similar to one made last week by Cisco rival Hewlett Packard Enterprise (HPE), which committed to make more than $2 billion in financing available to its customers that are strapped for cash amid the COVID-19 pandemic. The company’s financial arm, HPE Financial Services, is also rolling out a payment-relief program to help customers better absorb the costs of new technology.

While the Cisco program is largely focused on helping customers, Tuszik says the financing program will also benefit Cisco’s network of more than 60,000 partners through which more than 90% of the company’s business flows. Additionally, Cisco says it will accelerating partner sales cycles and allow them to offer customers more flexible payment options.

“Partners do not need to handle the cash flow challenges or delayed payments,” Tuszik explained.

Alongside special financing, Cisco is also expanding its Cisco refurbished equipment offerings to include a wider array of products.

Will Townsend, senior analyst of networking infrastructure at Moor Insights and Strategy, in a statement called Cisco's latest initiative a valuable one.

“Through my countless discussions with organizations, balancing cash flow while maintaining robust network operations is critical given the impact of COVID-19," he said. "I continue to be impressed with Cisco’s proactive strategy to enable its customers, partners, employees, and the community overall to maintain productivity in these trying times."

Cisco’s announcement comes at a time when roughly half of small organizations recently surveyed by Gartner said they planned to slow payments to vendors due to economic challenges. The report, which surveyed 192 CFO and finance executives earlier this month, found that 84% of respondents planned to delay or negotiating rental payments for the foreseeable future.

“CFOs are taking a variety of proactive cash management measures in the wake of this economic turbulence, with more than a third of respondents indicating that customer receipt payments will be delayed or go unpaid,” said Alexander Bant, practice VP for research at Gartner's Finance Practice, in the report.

Bant noted that while roughly 57% of large businesses with access to credit lines are drawing on them to weather the economic uncertainty, smaller firms don’t always have that luxury.

“Smaller firm CFOs are more often having to take more aggressive measures, including delaying rent and payments to vendors,” he said.

The findings reflect a larger trend resulting from a global recession sparked by the COVID-19 virus. More than one-third of American renters failed to pay rent by the first week in April, with more than 16 million filing for unemployment.

“Both large and small company CFOs face the prospect of delayed or unpaid customer bills,” the Gartner report stated.

Today’s announcement represents the latest effort by Cisco to help those feeling bearing brunt of the pandemic and associated economic recession.

Cisco CEO Chuck Robbins last week joined a growing number of tech companies that have pledged not to cut jobs in response to the pandemic.

“We’re actively involved in the community trying to help people who’ve been impacted by this, why would we contribute to the problem?” Robbins said in an interview with Bloomberg.

Robbin’s comments came just weeks after pledging $225 million to support local and global COVID-19 response efforts. This included $8 million in cash, $210 million in products, and up to $5 million in grants and funds matching Cisco employees’ donations to nonprofits.