Consumer financing can be an incredible tool for business growth. Ironically, many business owners feel hesitant to get started. Do you have questions about this financing option? This blog can help you understand why offering financing for your customers is important, how to implement it and what type of financing options you should include.
Consumer Financing Definition
If you’ve never used this type of financing before, you may be a little hazy on the details. In simple terms, customer financing involves providing third-party funding for client purchases. Chances are you’ve already seen this type of financing when you’ve visited superstores. Any time you’ve noticed deals advertising no payments for six months, or 0% interest rates, those are types of customer financing.
You’re not responsible for providing the credit directly for your clients. Instead, you choose a financing partner that offers credit. When customers sign up for funding, they can enjoy the benefits of deferred payments and more comfortable payments instead of having to deal with a lump sum. You receive the money for the item in full, minus a small percentage charged by the financing business.
Benefits of Consumer Financing for Your Business
This is one of the easiest decisions you can make in business. There are virtually no downsides and countless benefits for your company with financing options for customers. For one thing, it’s easier to give customers a gentle nudge to purchase big-ticket items. This can increase your profits and increase the number of loyal customers you have.
Advantages of Financing for Customers
Many of today’s consumers expect to have financing options when they go shopping. In the past, credit was mainly used only for the largest items, such as vehicles and equipment. These days, many people prefer to use financing for everything from electronics and computers to furniture and clothing items.
Having more ways to pay is never a bad thing. With offers for 0% money down, 0% interest for the first months or other enticements, you make your customers happy. They don’t have to choose between buying and saving money — they can do both and still manage their finances comfortably.
The Method for Getting Started
If you decide to offer consumer financing, your first step is to find a lender with the terms you want. Next, make sure to advertise your financing options on your website, on products, and in conversations with your customers. It’s easy for clients to apply for funding, and many get approved quickly.
Seek Expert Assistance
At Monterey Commercial Capital, our friendly team specializes in commercial finance solutions. We offer a huge range of business loans that help you reach your objectives, whether you need more working capital, equipment, or inventory.