As a business, ideally, you want your customers to pay for your products and services in one easy payment upon their decision to purchase. However, some purchases, for perhaps $1,000 to $10,000, are too large for many consumers to feel comfortable paying a single lump sum or putting the total on a credit card. That’s where a consumer financing company can help, allowing your customers to spread out their payments without risk to you so that you can gain their business.
But, how do you know which consumer financing company is right for you? Here are a few recommended questions to consider before you make your choice.
1. What Are My Consumers’ Fees?
Some consumer financing companies charge application fees for consumers to sign up for their financing program. This can be a turn-off for your customers, who will view the fee as another charge added to their final purchase price, along with tax and interest.
UCFS does not charge consumers an application fee to start the program. Only interest, set by the business agreement with UCFS, is charged as part of their low, fixed monthly payments. A consumer’s credit level does not influence their APR (interest percentage).
2. How Quickly Will I Get Paid?
UCFS will process your payment within 1 to 3 business days. You’ll receive your payment quickly — deposited directly to your bank account — via Automated Clearing House (ACH).
A benefit of partnering with a consumer financing company instead of structuring your financing program is the lowered risk for your business — you can be certain that you will receive payment for your product or service, and UCFS will handle collections from your customer for the life of their loan. Some companies can take several weeks to deliver your payment.
3. How Much Does Financing Cost Me, The Business/Retailer?
A consumer financing company typically charges a percent of the total sale. UCFS charges a small percentage, perhaps 0 to 16%, depending on the consumer’s credit quality, and you, the business, get your funds right away, less the discount percent. Your sale can go through immediately, and UCFS holds the risk of consumer repayment.
If a finance company indicates there are no fees to the business, then the consumer would bear the brunt of the financing cost, discouraging the consumer from making their purchase.
In addition, some consumer financing companies charge setup fees and monthly fees. UCFS does not require setup or monthly fees from businesses in our merchant program.
4. Are There Spending Minimums Or Maximums? Do My Products Qualify?
There may be business spending brackets that a consumer financing program requires you to adhere to as a business. However, you also need a financing program that offers consumers dollar amounts aligned to your products.
Similarly, ask if you can finance sporadically or if the finance company has minimum finance frequency requirements. Choose a program that gives you and your customers the proper flexibility.
UCFS does not have minimum financing frequency requirements. Therefore, whether you submit one or 500 credit applications monthly, UCFS welcomes your business.
5. Will The Consumer Financing Company Help My Business Promote The Program?
Once you have a financing program, it’s important to advertise it to your customer base and beyond. Consider whether the financing company provides you with any promotional materials and whether they allow you to alter the messaging.
Considering how the financing program’s messaging reflects your brand would be best. Having a well-respected and professional consumer financing partner could elevate your company’s reputation.
UCFS will create a personalized consumer brochure with your logo on it. We provide the first printed copies; you’ll get a PDF to print more. We can also provide rack cards, posters, ink stamps, window clings, hang tags, and more.
6. How Will You Learn The Financing Details?
It would be best if you inquired about training programs for you and your salespeople. You should be able to explain the financing program to interested consumers in clear, easy terms. Knowing how the program works, the consumer payment terms and amounts, when the first payment would be due, and interest-related charges are vital. Explaining it will help instill confidence in your customers and reduce any anxieties they may have about signing up for financing.
UCFS provides personalized orientation and system training when you start with our financing program. In addition, printed and video materials are available in the financing portal. And UCFS representatives are available by email or phone for up to 17 hours most days.
7. What Is The Consumer Application Process?
The consumer application process can vary significantly across financing programs. Consider whether you want an application completed over the phone or via the internet. Can it be done on a tablet, or does it require a computer? Can the finance company offer both online and paper options? How much information does your customer need to provide? Each piece of this question comes down to a central theme: convenience. If there are too many steps or the consumer cannot readily access all the needed information, you may lose their business.
UCFS accepts credit applications online, and over the phone, so you can use whichever method suits your business. In addition, companies can post a credit application link to their website so customers can enter their credit app. The portal is available 24/7, and UCFS representatives are available for new credit applications or application inquiries and support from 8 a.m. to 1 a.m. most days.
8. How Quick Is Consumer Approval?
Choose a program with a quick, straightforward approval process. If consumers cannot be approved almost instantly, they may decide to forego their purchase.
UCFS offers fast credit approval — within minutes of application. A brief wait period allows you to continue setting up your customer’s financing plan, which can cover all or a portion of a business’s products or services.
9. Is The Consumer’s Interest Rate/APR Fixed?
A fixed interest rate is essential for consumers to know exactly what their monthly payments will be. A variable rate can be hard on a customer’s payment timeline, causing late payments and dissatisfaction for all parties. A fixed interest rate with a set number of payments means consistent payment amounts, as opposed to a revolving credit card with minimum payments that would lead to more extended payment periods and extra interest dollar amounts.
When you partner with UCFS, you choose a program with fixed interest rates for all consumers, no matter their credit quality. Monthly payments can be low, giving consumers from all income brackets access to the products and services they need or want!
10. How Long Are Consumers Given To Pay Off Purchases?
Some consumer financing programs offer timelines as short as six months or as long as 48 or 60 months. Choose the program term options you believe would be most comfortable for your customers.
Also, ask if the consumer financing company offers a same-as-cash option. There may be an additional merchant fee, but that small dollar amount would help your customers save interest. In addition, a 6-month or 12-month same-as-cash option can increase customer satisfaction.
UCFS discusses financing options with our prospective merchants to set a program that meets the business and consumer’s needs.
Consumer Financing Is Easy With UCFS
If you want a consumer financing company that treats you as a partner and readily answers all of the above questions, UCFS is the one for you. Learn more about our Merchant Programs or call us at 877-373-3482. We look forward to helping you.