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The Different Types of Consumer Finance Programs For Merchants

As people shop for big-ticket items, they consider their purchase and payment options. Many shoppers rely on a financing solution to afford the products they want or need. Understanding the different types of consumer finance programs helps you better serve your customers while making intelligent choices for your business.


When you think of financing options or loans, your mind likely goes straight to banks. This is because banks are one of the most popular sources of financing. According to the FDIC, almost 95 percent of American households utilized a bank or credit union.

And while banks are reliable sources for planned loans, they don’t cater to businesses looking for consumer finance programs. When a customer goes to their bank for a loan, the process includes quite a lot of time and paperwork. This situation isn’t ideal for shoppers who want to make an in-store purchase on the same day they walk in.

But if businesses don’t offer a consumer financing program, many shoppers find that the bank is their best option for financing their purchase. Therefore, most –– if not all –– businesses would benefit from offering a fast and convenient consumer financing solution accessible to their customers at the time of purchase. As a result, companies would see more sales, and customers would enjoy the convenience of point-of-sale financing.

Credit Unions

Credit unions are popular options for shoppers needing personal loans. Credit unions are non-profits that exist to provide financial services to people with a common bond. Still, many credit unions allow new members to join even if they don’t meet the initial eligibility requirements.

Credit unions are wonderful resources for financing. But, that is if a consumer is already a member. When shoppers need financing for an item, they want to make the purchase as soon as possible. Unfortunately, it can take weeks for loan approval from a credit union. And that’s if you’re already a member. Trying to gain membership and then requesting a loan can take ages.

As you think through consumer finance programs for your business, consider options that provide quick notice of approval so your shoppers can make in-store purchases.

Sales Finance Companies (SFC)

After consumers have purchased a big-ticket item, they might be informed that their note was sold to a sales finance company. These companies buy installment loans made by dealers or merchants to their customers.

The major downside of using a sales finance company as a consumer finance program is that the customer never interacts with the SFC. Instead, shoppers make payments to a dealer, but those payments then go to the SFC.

In this type of consumer financing program, customer service can become an issue. Customers don’t have immediate access to the firm handling their payments and financing. If any problems arise, it takes time and effort from both the customer and the merchant to resolve them.

A better consumer financing option provides accessible, friendly, and helpful customer service that makes your clientele feel valued.


Pawnbrokers offer collateral-based loans. Consumers bring their items to a pawn shop. If the pawnbroker is interested, they offer the consumer a loan while holding the item in their shop. Once the consumer pays the loan in full, they can go home with their possession.

While the process seems simple, obtaining loans from pawnbrokers rarely –– if ever –– is truly the best solution for a consumer. Pawn shop interest rates are astronomically high. But because pawnbrokers don’t run credit checks, anyone can get a loan. This makes pawn shop financing appealing to many shoppers with little or no credit or who can’t obtain financing from other sources.

Thankfully, pawn shop loans aren’t the only consumer financing option for shoppers with bad credit histories.

Family and Friends

Getting loans from family or friends isn’t technically a consumer financing program, but many shoppers look to these sources to afford big-ticket items.

According to Bankrate, 60 percent of Americans have lent money to friends or family members and expected them to pay it back. Of that number, a shocking 46 percent reported a negative outcome.

When a person tries to finance payment through a loan from a family, it’s likely to end poorly. And when that happens, more than money is lost. Ties are broken, and relationships suffer severe tensions.

It’s best for all parties if consumers seek financing from sources other than friends or family. They’re more likely to make payments when they enter into a formal business agreement with a firm, and loving relationships won’t be affected by late or incomplete payments.

Consumer Finance Companies

Consumer finance companies specialize in personal installment loans. Financing firms like United Consumer Financial Services provide services that both empower shoppers and benefit merchants. And of all the finance programs we’ve covered in this article, consumer finance companies are the best option for customers and merchants.

CFCs like United Consumer Financial Services provide point-of-sale loan applications to shoppers who want to pay for their purchases in monthly installments. While every CFC operates differently, UCFS provides a loan approval notice within minutes of the application. This allows shoppers to increase the value of their order, upgrade their purchase, start their service or bring home their goods the same day.

Consumer financing through a company like UCFS brings purchasing power to shoppers regardless of their ability to pay upfront. In addition, UCFS boasts high approval percentages, which means even shoppers with little or poor credit could bring home the goods or services they want and need.

This model is ideal for businesses that want to offer financing to their customers. After being accepted by UCFS as a business customer, companies can provide financing to their customers at the point of sale. Applications, contracts, and consumer payments occur through UCFS’s websites. UCFS takes care of payment collection, customer service, and client communication.

Consumer financing through a firm like UCFS provides incredible options for both shoppers and merchants. Of all your considerations, choosing to offer financing through a financing company like UCFS yields the best experience for your customers and increases your bottom line.


As a business owner, you’ve got a plethora of consumer finance programs to pick from. But to provide the best solutions for your customers –– and for your company –– choose to work with a consumer finance company like United Consumer Financial Services. So contact our team today to join with thousands of other businesses who reap the benefits of our consumer financing solutions.