What Is Customer Financing?
Customer financing – also referred to in the industry as consumer financing – is a way businesses enable their customers to make low monthly payments for the products or services they need and want. Customer financing is typically utilized when consumers make a significant purchase and would not be able to pay with cash or a credit card, which is needed for every-day living expenses.
In its best execution—for both the business and the customer—consumer financing is handled by a third-party company. By choosing to work with a financing company like United Consumer Financial Services, businesses can provide their products or services to more customers. And when you choose a financing firm like UCFS that’s been at it for years, you benefit from the expertise that comes with time spent in the industry.
Benefits of Offering a Customer Financing Program
Customer financing is a great option for businesses of all types, from sellers with small businesses to large corporations. The benefits are the same across the board, and every company can benefit from a third-party financing program.
1. Convert Customers
The goal of every business is to convert browsers into buyers. Whether it’s browsing in your retail store, on your website, or if you’re doing a demo in someone’s home or via Zoom – offering doable monthly payment amounts to customers gives them the opportunity to make purchases that otherwise would not have been possible. Consumer financing provides options for customers who would rather not – or cannot – pay with cash or who don’t have credit card bandwidth. Especially when larger purchases are concerned, providing consumer financing gives your customers the ability to purchase the products or services they need without feeling the financial pressure of paying in full upfront. This means customers are happy and businesses see more conversions.
2. Improved Cash Flow
You’re familiar with the adage that it takes money to make money. Customer financing programs enable businesses to operate without disrupting their cash flow. Working with a third-party financing company allows businesses to provide customers with the goods and services they desire right away while staying cash flow positive.
Independent financing firms handle all of the consumer repayments for the life of the loan, and the business receives a high percentage of the finance amount within one to three days of the contract being signed. That means cash flow is improved when using financing!
3. Promote Referrals and Repeat Business
Once a customer has shopped with you, the likelihood of them becoming a repeat customer is high—about 27 percent. And after that, they’re even more likely to purchase from you again and again. Offering financing gives browsing patrons the opportunity to shop with your company for purchases they might otherwise not have considered. And once they’ve made a purchase with you—and they fall in love with your product or services—statistically, they’ll come back to you for more, or tell their friends and family!
4. Expertise to Handle the Financing
Running a successful business takes more than just passion. When you add a third-party financing option for your prospective customers, you’re adding the expertise of that company for the benefit of your consumers.
Financing is certainly a huge benefit to your business and to your customers. By taking advantage of a financing program, your business—and patrons—reap the rewards. The finance company’s expertise in customer service, technology and handling the consumer repayment for the life of the loan is seamless to your business. Using experts in financing, instead of trying to formulate an in-house financing plan is ideal. Financing companies have the expertise to handle it all, so business owners can focus on their business.
How to Use Customer Financing Programs to Convert More Shoppers
One of the benefits of customer financing is that it affords a wider base of browsers to become customers. Utilizing customer financing gives companies of all sizes the opportunity to better serve their patrons.
1. Make Purchases Possible
Because payment plans are more doable than a large upfront purchase, consumers can obtain the products they have their eye on, and businesses help more customers. UCFS customer financing is most often used for big purchases, like furniture, jewelry, legal services, pets, home improvements, and medical products or services. When you offer financing to make purchases possible, you’ll draw in more customers who otherwise couldn’t consider your products. Think cash, credit card, or low monthly payments.
2. It’s Easy and Fast
Customer financing programs are incredibly easy for your salespeople or customers to utilize, and these programs are fast. It usually takes just seconds to learn if the credit application is approved. The easier and faster the approval process, the higher the likelihood that patrons will convert from a browser to a buyer.
3. Choose the Provider and Program That’s Right for You
All customer financing programs are not created equal. When choosing a program, it’s crucial that you work with a company with experience and tailored solutions. The upfront program specifications are typically designed to allow consumers with poor credit quality to be approved, because the business pays a slightly higher fee when the finance company take higher risk.
Why work with a customer financing company like UCFS?
United Consumer Financial Services exists to help businesses grow – period! Helping consumers who don’t have readily-available cash for their purchase means businesses can convert more shoppers to buyers. When it comes to financing programs, UCFS goes above and beyond to give both businesses and their customers an exceptional experience.
1. User Friendly
A great feature of UCFS’s online credit application system is that a business can set up their own link for customers to complete their credit application. The link can be sent by email or posted on the business’s website or socials. Sellers save time and the credit application process is simplified for both businesses and customers, so financing is simple.
2. Tailored Service
The team at UCFS works with our clients to tailor financing services to meet your unique needs. We provide solutions that enable businesses to get products and services, typically between $1,000 and $10,000, in the hands of more customers, providing them with payment amounts that are manageable for most budgets, from $50 to $265 per month, depending on the total amount financed and number of monthly payments.
3. Decades of Proven Experience
Most importantly, UCFS provides financing services that are backed by decades of experience. Since 1980, we’ve been offering financing services catering specifically to retailers, in-home sellers and call centers. UCFS manages consumer repayment for the life of the contract through our U.S.-based call center. No one knows the industry better than our knowledgeable and friendly team.