Are you a small business owner looking for new ways to boost sales, foster customer loyalty and build a recurring clientele? It’s time to consider a financing program.
Offering financing solutions to potential customers is nothing new. In fact, big box retailers have been using it to give their customers more purchasing power for years. Unfortunately, small businesses have been slow to adopt financing programs, mostly because they lack the means to set them up and take on the additional risk.
But the effects consumer financing has on a business’ order size cannot be ignored. It’s time for you, the merchant, to start leveling the field with large brands by offering financing options to your customers.
How consumer financing works
Consumer credit products are a lot like credit cards. They allow merchants to extend a line of credit to their clients, enabling them to pay for purchased items over time.
If you have a financing solution in place, you will typically be receiving your funds within just a few days after a sale is completed. The process of collecting payment from the consumer is passed onto the payment services provider from whom you acquired the credit product.
Why offer consumer financing?
A financing solution may seem like a lot of work, but if you look at the bigger picture, you’ll see why many merchants are increasingly embracing consumer financing.
- More sales, larger orders
Financing options give customers more purchasing power, which in turn drives sales. Your clients will be inclined to buy more of your items if they know they don’t need to pay the full amount up-front. Offers like “No Payments and No Interest if paid in six months” are very effective in increasing sales.
- A broader pool of customers
With a financing solution, more potential clients will be able to buy your products, even when they have little or no credit. Therefore, in addition to expanding your clientele, you will be able to sell to customers that need your items the most.
- Upfront payment
Even though your clients have time to pay, you’ll still be getting all your money. A credit financing provider typically deposits the funds into the merchant’s account before the customer actually makes payment.
- No signing-up charges
Contrary to popular belief, many financiers don’t charge up-front costs to opening such a program. All you have to do is sign up, and your clients will have the much-desired flexibility to make purchases as they wish.
- No risk to you
Because the financing company will guarantee payment for every transaction, it’s not your job to worry about a customer not paying for a purchased product. Once you’ve closed a deal, you get your money, and the financier takes over to make the follow-up. This enables you to focus more on your business and make even more sales.