The move is part of a bid by the networking giant to keep its revenue growth rising at a rapid pace. But the risk, as with any lender, is that Cisco might find itself with a bunch of bad loans, which it would have to charge against its earnings. Financing purchases has been a particularly sensitive issue in recent weeks. Shares of phone and Internet service companies, some of which are Cisco customers, have fallen to new lows, and some have seen their access to cash diminish. This environment is making it tougher for the privately held start-ups that buy from Cisco to get cash as well.
Cisco is in a sticky position.
So lending money becomes a way to gain an edge in a highly competitive market. And anyone that sells equipment to these carriers is most vulnerable. But Cisco isn't interested in getting into the finance business. But with the public market beating a steady retreat from telecom services stocks, it appears that Cisco will bear some of the burden. Read our conflicts and disclosure policy .