Consumer financing has proven itself an incredible tool for companies to serve a wider breadth of customers while moving products and services to grow their businesses. But if you don’t know a lot about consumer financing , you might want a few questions answered.
You’ve likely heard some things regarding consumer financing: how it works, who it targets, and how it affects your business. In this article, we separate fact from fiction and dispel five common consumer financing myths.
1. Customers Need to Open a New Credit Card to Apply for Consumer Financing
The first common myth regarding consumer financing is tied to credit cards. Many shoppers believe they must open a new credit card with the consumer financing company they’re submitting their application to. Let’s put this myth to rest!
Customers don’t need to open a new card when applying for consumer financing. In fact, when businesses partner with United Consumer Financial Services, the financing process is streamlined. Approved shoppers can link their existing credit card debit card or bank account to have their payment made automatically, taking the work out of making payments.
Easy, automatic payments means there’s no need for additional credit or debit cards. A contract between you and your customer, then to UCFS, means a customer makes their purchase from YOUR company, not another. By offering consumer financing, you put purchasing power in the hands of your customers while streamlining the payment process. They’ll enjoy making their purchase with monthly payment, not a new credit card, and you’ll love how easy it is for both them and you!
2. “Buy Now, Pay Later” Targets Only Millennials
It’s true that consumer financing services are especially attractive to the Millennial crowd. Shoppers in this demographic as well as younger generations are less likely to utilize credit cards than older consumers.
Whether it’s an aversion to credit card debt, mounting student loans, or simply the difficulties of gaining approval for a credit card, many younger shoppers enjoy the ease and simplicity of consumer financing services.
But Millennials aren’t the only ones who seek out financing options. Consumers from every age group are increasingly taking advantage of the easy, affordable monthly payments that financing offers. In fact, 41 percent of shoppers who used consumer financing in March 2021 were aged 54 and older.
Offering consumer financing doesn’t narrow your pool of shoppers. On the contrary, by providing financing options, you open yourself up to serve a wider audience. Plus, when consumers know you offer point-of-sale financing options, they’re more likely to shop with you over a competitor.
Consumer financing provides a way for you to bring in more customers of all demographics while empowering them to make the purchases they want and need.
3. Application Time Loses Sales
You might have heard the consumer financing application process is painstakingly time-consuming. Thankfully, lengthy application processes aren’t an issue when you partner with United Consumer Financial Services. In fact, your customers can receive notice of approval within minutes of applying.
Quick application—and notice of approval—is convenient, but why does it matter for your business? The answer is simple: sales. Every part of the sales cycle leads to the close. And if the consumer financing application takes too long, a shopper might become overwhelmed, lose interest, or believe it’s too much work, then decide to not make the purchase. When making a sale, timing is crucial. That’s why UCFS’s speedy customer application continues to be a desirable benefit for businesses choosing consumer financing.
Consumer financing is all about providing a better shopping and purchasing experience for your customers. Convenient, easy, and fast financing application accomplishes this—plus more. When you partner with UCFS, you provide affordable payment options through a simple application that customers can complete in just minutes, allowing them to make their purchase right away.
4. Consumer Financing Ruins Customer’s Credit
As a business owner, you want to prioritize customer care. That means choosing financing options with your customer’s best interests in mind. Maybe you’ve heard that consumer financing damages your customer’s credit score. Thankfully, the opposite is true. When opting for an installment loan, consumers can build up their credit score when paying in a timely manner. Auto, mortgage, personal and student loans are all types of installment credit. Installment loan payments actually help your valued customers lift their credit score. For customers that don’t have a long credit history, this type of loan – with a set APR and set monthly dollar amount – can help customers build their score.
With this system, shoppers are able to purchase the goods and services they want without putting their credit at risk, presuming they make all payments in full and on time to maintain a good payment history. Customers can pay automatically from their bank account, credit card, or debit card. And when they choose autopayment, they’re not at risk for missing payments.
Partnering with UCFS ensures you provide easy, affordable payment options that work for your clientele. They can enjoy the benefits of monthly payments that work with their budget.
5. Offering Financing Drains Business Resources
You might have heard that offering consumer financing to your customers will require additional time and resources from your business. We’re here to dispel that myth! Providing consumer financing through a trusted firm like United Consumer Financial Services empowers your customers to make their purchases without draining your business’s precious resources.
Credit applications are fast to submit – by either your employees or your customers – with automatic approval appearing online in under a minute, and manual decisions taking just a few minutes. After the credit app is approved, it takes 2-3 minutes to complete the financing contract details, with e-signing by email and online, or with a paper credit application or contract for in-person selling, when preferred.
The team at UCFS takes care of customer communication and payment collection. Their U.S.-based (Cleveland, Ohio) customer service team is available to your clients to provide answers to all of their questions regarding their payments and accounts. This high-level service frees you up to focus on other aspects of customer service, employee care, and business growth.
As you’ve read, consumer financing offers so many benefits to both your customers and your business. Consumer financing is a great option to serve your customers and build your company. When you partner with a consumer financing firm like United Consumer Financial Services, you can trust that you’re getting the best care, and your valued clients receive the same!