Finding the right company to offer financing to your customers can be a real challenge...
...but it's a necessary evil, right?
Let's face it - you'll lose customers to your competitors if you don't make it easy for them to buy your equipment.
I'll show you some of the most important considerations in setting up a financing program for your clients.
Let's jump right in...
Consumer vs. Business Finance Companies
One important consideration is whether most of your customers are consumers or businesses.
You'll find most finance companies work with one or the other, but not both.
There are 2 reasons for this:
Reason #1: Financing business equipment versus financing household items are two totally separate animals. This applies to rates, qualifications, and the entire process.
Reason #2: Consumer financing laws are vastly different than business financing laws.
If you primarily sell to consumers, a company such as ours will not be the best choice for you.
But... if all, or most of your sales are to businesses, you will probably want to work with a business financing company.
Now, there are a few businesses out there that claim to be experts in both areas.
Some of those who have tried them might tell you...
We find that most businesses that work with both types of clients need to find one solution for business customers and a totally separate solution for consumers.
Note: We do one thing. We help small businesses acquire financing. We are not a good solution for you if you need to help folks who don't own a business.
Should Your Customers Apply For Financing From Your Website?
It really depends.
Some of the equipment dealers we work with like having an "apply for financing" link on their websites.
Others prefer we have a conversation with people before pulling a credit check.
The truth is, in most cases, your customers will still have to send in other information.
Depending on who your customer is and what they're buying, that could include:
personal financial statements
Now, there are "application only" programs out there. We utilize programs like this when appropriate.
There are two problems with application only financing:
Those programs turn down a lot of prospects that could qualify with a little bit of work on the finance company's part.
The less information a financing company has, the more they have to compensate for risk. That meanshigher rates for your customers.
Many equipment sellers we work were previously set up with an online-only portal.
You, know, the kind that offers "decisions in minutes."
Most have reported that far fewer of their customers get approved than were originally promised.
A lot of times, this can cost you sales.
Here are some of the reasons a computer would disapprove someone:
Credit scores that aren't perfect
Open tax liens
Bankruptcy in the past 7 years
Buying equipment that isn't brand new
Being new in business
Now, the truth is, there are plenty of people searching for financing who won't have a chance of qualifying anywhere.
However, we've helped people recently with any and every one of the predicaments listed above. Many of the people we help buy equipment would not be able to obtain financing using only an online decision engine.
Can You Avoid Sending Your Customers to Thieves?
It's unfortunate, but there are a lot of sleazy companies out there in the equipment financing world.
If you send your customers to a crook, it will reflect poorly on you and your business.
(Plus, you'll probably feel bad...)
Did you know that there are equipment leasing companies who make more money keeping customer deposits than from actually funding transactions?
That's disgusting and something you'd probably like to avoid.
We provide our customers with a lot of information to help them avoid scams.