Businesses that can offer their customers financing options will increase sales. If you offer high priced goods or services, customers may not always have the funds on hand to make the purchase. However, they might be able to buy your product or service by making payments over time. In these cases, business owners can partner with financing companies that allow your business to offer financing to customers. Keep reading to learn how to partner with financing companies in your industry.
Decide Which Products To Offer Financing For
Firstly, you should establish large ticket items that your customers need financing for. For examples, your business might include electronics, jewelry or medical services. For almost any product or service over $100, you may want to consider offering financing options to customers. Moreover, for purchases over $1,000, the ability to work with financing companies could increase your sales, giving your customers the ability to pay for the item over time. This is a great option for consumers who need to clean up credit and would not like to pay with their credit card.
Shop Customer Financing Companies Costs
Next, you will want to start shopping for financing companies that you can partner for. Some companies have packages that are free for small businesses. Meanwhile, other companies have a flat fee for their services. Depending on the monthly or percentage financing fees, you will have to decide if the additional sales will compensate for the added costs. If your product is similar to those mentioned above, you could end up paying off the financing firm’s fees with just one additional sale. Make sure you research many financing companies for small business as they can have varying fee structures and costs of debt for the end consumer.
Apply For An Appropriate Financing Company
After calculating your budget for offering financing to customers, you will have to choose a partner. As you will see, many financing companies specialize in lending for particular products, business models and industries. If you are distributor or manufacturer, a vendor financing company would help your customers buy inventory while eliminating risk for your business. In this case, the financing service specializes in larger procurement process transactions from $4,000-$500,000. Certainly, they will be able to offer favorable terms to customers who are businesses themselves. Depending on your customer need, apply to company that services your type of business.
Types Of Consumer Financial Companies
There are various consumer financing companies you can partner with. Many businesses struggle with finding the most effective financing company for their customers. Of course, selecting the right institution depends on budget, company goals and consumer analysis. As a business owner, team up with financing organizations sooner rather than later to avoid losing potential clients and hefty service orders. Read on to discover which consumer financing companies to partner with.
First, connect with direct-to-merchant financing companies. When partnering with this company, merchants pay a small fee to receive payment from lenders in full at the time of a sale. So, instead of receiving payment over a certain time length, merchant services are paid instantly and lenders are paid over time. Of course, these financing options require various minimum requirements for customers to qualify. For example, there might be lower limits, such as only $35,000 per customer. More so, they may implement stricter credit score demands, such as a score of 620 or more. Plus, businesses offering this solution need to have a certain minimal annual revenue. As a result, lenders can assure you will cover any type of shortage in times of disputes or fraud. Certainly, consider partnering direct-to-merchant financing companies.
Buy Now Pay Later Financing
Secondly, consider partnering with a buy now, pay later financing company. This financing option allows customers to purchase your product or service without paying on the spot. Customers can choose from predetermined monthly payments to settle their debt. For example, you can allow consumers to pay $5 a month to payoff a $50 purchase in a total of 10 months. Or, you can allow customers to fulfill $10 monthly bills to payoff their purchase in about 2 months. More so, customers are only charged a fee if they fail to pay their bill at the allotted time. Certainly, partner with buy now, pay later financing companies to provide consumers with the opportunity to buy your products without having the funds at that moment.
Next, partner with a multi-installment consumer financing business. This financing institution allows customers to payoff purchases in four installments over a several-month period. For example, you can charge customers 1/4 of their purchase cost bimonthly to payoff their bill in as little as 8 months. More so, you are charged less than most other financing options with this solution. In fact, you only have to pay a $.30 transaction fee and 2.9% of the transaction value. As a result, this financial option saves you money and provides flexibility for your customers. Plus, this financing option can increase your AOV by more than 30% and improve conversion rates by about 18%. Definitely partner with a multi-installment consumer financing company for business-customer operations.
Customized Consumer Financing
Furthermore, consider teaming up with a customized consumer financing company. Add this financial institution as a payment option at checkout. When chosen, customers need to qualify for eligibility. This financial option provides instant decision on eligibility and allows consumers to access estimated monthly payments for their purchases. Then, customers can choose a preferred payment date where they can afford to pay. For example, consumers may choose their payment date as the next time they get paid from work or when a check clears at the bank. Or, they can receive financing for Christmas products and choose to pay them after the holiday season. Certainly, collaborate with a customized consumer financing company to enhance customer experience.
Low Credit Financing
Finally, team with low credit financing companies to help customers with bad or no credit. This financial option provides consumer leases instead of traditional loans. As a result, customers can access products, services and merchandise while conveniently paying off costs over 12 to 18 months. Of course, consumers must fill out an application and become approved. Typically, applications are approved even for those with bad credit, no credit or are going through bankruptcy. In fact, they can simply get approved for increased price products such as truck financing. Once approved, customers can receive financing from $150 to $5000. Certainly, consider partnering with low credit consumer financing companies to improve business sales.
There are several consumer financing companies you can partner with. First, connect with direct-to-merchant financing companies to receive payment upfront while consumers pay back the lender over time. Secondly, partner with a buy now, pay later company that allows customers to pay their bills over a predetermined period of time. Next, partner with multi-installment financing companies to allow consumers to access your services while providing them with simple four-time installment charges. Furthermore, consider collaborating with a customized consumer financing option that allows customers to choose the date they payoff their purchase. Finally, offer low credit financing for customers experiencing bad credit, no credit or bankruptcy. These are a few of the top consumer financing companies you can partner with.
Integrate Your Financing Program Online
The best financing companies for small business have established, secure software that will work directly with your website or online eComemrce store. Clients can either log in to sign up for financing options. Or, the customer financing program can integrate directly into the check out process. As a result, customers may end up buying more because they have the option to use credit for their purchase. Once the lending platform is integrated with your business, you are ready to start offering financing to customers.
Start Promoting Financing To Your Customers
Now that your financing company’s platform is integrated, you should tell your customers about the credit options. There are many ways to advertise the fact that you offer financing. When checking out on the website, you can have a notice or a link that tells customers to offer financing. Inform current customers that they can split their next purchase into smaller payments in installments. Once customers start to find out about the financing options you offer, you will be able to sell more of your goods and services.
Partnering with financing companies is a great opportunity. You can earn more business by offering customer financing and keeping your risk low. To partner with a company, decide which products would be suitable to consumer financing. Then, check out the various financing fee structures with free, flat or flex rate. Then, sign up with an appropriate consumer financing partner and you will be really to integrate it into your business. Finally, let you customers know that you offer small business financing to them. They will start to use it and spend more with your company.