Consumer Financing Solutions Part 1: Common Reasons Why Businesses Offer Financing
This is the first post in our three-part series on consumer financing solutions. This article begins the discussion on incorporating consumer financing into your business by highlighting its benefits and examining why consumer financing may be right for your business.
Closing the deal, boosting sales, increasing conversions, growing the customer base, providing care to more patients – however your company or practice views and acknowledges growth, one thing is certain: Growing your bottom line comes down to acquiring new customers.
Of course, this is always easier said than done because, as you well know, a potential consumer or patient may be extremely interested in moving forward with your services, but if they don’t have the upfront funds needed to cover costs, they will waive the service or decline the product or work altogether.
Enter a consumer financing solution and you could be experiencing a completely different outcome.
How Consumer Financing Works
While each consumer financing program will vary depending on provider, most are generally designed to convert potential consumers into new and reoccurring customers, clients and patients.
How? By offering a third payment option – in addition to cash and credit card – via fixed, low monthly payments.
Consumer financing shows potential customers that an affordable monthly payment plan is available, so they can obtain the product or service in advance and not have to save for several years and then buy.
Additionally, consumer financing helps customers (who may have initially been deterred by an upfront payment) feel capable of repayment and confident in the purchase or service.
In general terms, this is how consumer financing works:
- Your customer selects the financing option and applies for financing by completing a credit application.
- Your customer gets approved.
- You move forward with the sale, project, service or medical procedure right away.
- After the contract is signed, your business is funded the cost of service, less the small financing service fee.
- For home improvements, once a project completion certificate is received by the financing provider, your business is funded the cost of service, less the small financing service fee.
- When the sale is complete, your customer begins repayments to the financing provider.
- Your business typically has no responsibility for consumer repayment. (Excludes fraud)
10 Benefits of Offering Financing to Customers
Consumer financing is an advantageous payment option that offers improved convenience and acts in the best interest of your clientele and business.
Delivering an array of advantages, here’s how your business could benefit by offering consumers a financing solution:
Your business can:
- Help more customers
- Stay current
- Have the potential to increase conversions to sell more
- Have the potential to make larger sales
- Have the potential to make sales more often
- Drive repeat business
- Reduce financial risk
- Offer payment flexibility and give customers the best opportunity to repay their account in full
- Increase customer loyalty
- See an increase in word-of-mouth advertising
We can’t forget to mention that with the right financing partner, incorporating a consumer financing solution into your business is easy, stress free and a way to stand out from competitors.
With someone else assuming your customers’ financials, you can focus on running and growing your business with even more sales – no additional steps, no stressful follow-ups, and no time wasted on managing client financing.
Is Consumer Financing Right for Your Business?
Does offering consumer financing seem like a no-brainer? Are you wondering, “What’s the catch?”
Without question, integrating a consumer financing solution into your business fosters a lot of pros, but you still need to make sure it’s the right move for your business.
As you’re researching various customer financing programs and determining if one is right for your business, here are six things to consider:
- What fees are associated with this consumer financing solution and will it allow me to keep more of my money?
- Can my customers or patients finance the total cost of my services through this consumer financing solution?
- Will this consumer financing solution be available to as many consumers and patients as possible – even consumers with credit that is not optimum?
- Will this consumer financing solution be a good financing option for all my customers?
- Will this consumer financing solution work in the best interest of both my customers/patients and my business/practice?
- Will this consumer financing solution align with and tailor to my business/practice?
Discover One of the Best Consumer Financing Programs with a Top Provider
With UCFS, a leading provider of fixed-term installment consumer financing, you can streamline and grow your business, approve more customers, and help them get the services, products or care they want and need.
We work with merchants, distributors, medical providers, retailers and most other types of businesses to provide the best consumer financing services available today – so you can help your customers finance all or just part of their service, product or procedure through an option that is favorable to them and your business on multiple levels.
What questions do you have? We’re here to help you make an informed decision for your business and look forward to discussing how UCFS can grow your top and bottom line.
Stay tuned for our second post in our three-part series on consumer financing solutions where we will discuss what you need to know about offering consumer financing, including the training and one-on-one support offered by UCFS.