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Why You Should Not Set up Your Own Consumer Financing Program

Offering consumer financing is a proven way to serve more customers and increase your profits. But setting up your own financing program can cause problems for your business. Below we’ll explain why you shouldn’t set up your own financing program, and then we’ll show you an easier, better way to handle consumer financing.

1. Negative Affects to Your Cashflow

Consistent cashflow is critical for the growth of your business. Having a positive cashflow means you have more money coming into your business than is going out. But if you face a halt in your cashflow –– even temporarily –– you could face serious consequences for your business.

Cashflow problems are the cause of more than 80 percent of business failures. Properly managing your cashflow allows you to see where you’re spending and how much you’re spending. Planning around your business’s scheduled cashflow puts you in the ideal position to confidently make purchases to help your company grow.

Offering consumer financing allows you to increase your average order value, serve more customers, and increase profits with increased cashflow. But how is cashflow affected when businesses handle financing in-house?

Some companies try to set up their own consumer financing programs without the help of a financing firm. Unfortunately, in-house financing presents a risk of a halt in cashflow. This is normal when providing financing options to customers as payments take a few months or years to come in. But when you’re dependent on consistent cashflow for day-to-day operations, even a few weeks with a decrease in cashflow can have a negative result on your business.

Thankfully, working with a trusted consumer financing firm like United Consumer Financial Services means you won’t face lapses in your cashflow when customers choose financing for their purchase. UCFS sends payment to your business within a few days so you can continue operating as normal.

Choosing to partner with a consumer financing firm secures your cashflow while your customers enjoy the convenience and affordability of monthly payment options.

2. Risk for Missed Payments

Buy Now, Pay Later solutions are an ideal way to promote business growth and serve your customers. Any time you offer a “buy now, pay later” option, there’s a chance your customer will find themselves in a situation where they are unable to honor their payment plan. And as a business owner, you must do everything you can to plan for default payments.

But when you’re the party responsible for payment collection, missed payments can interrupt your income and spending. Taking all the responsibility for collecting financed payments puts your business at risk if customers miss their payments. That’s why choosing to finance through UCFS should be a strategic part of your customer financing plan.

Partnering with UCFS for your consumer financing preserves your scheduled income.

3. Additional Employee Costs

Some businesses offer in-house financing attempting to cut costs. They think taking on the task themselves cuts out hidden fees. In reality, conducting your financing yourself is costly.

When you bring customer financing in-house, your business is responsible for all payment notices, collection, customer communication, and all other aspects that make a financing program successful. Small businesses who opt to stay in-house with their financing soon realize that it takes additional hands to execute their programs.

It’s common for companies with in-house financing to hire at least one employee to handle their financing programs. And as you know, bringing on new team members gets expensive.

The hiring process alone can cost hundreds of hours in time interviewing, narrowing down candidates, and making sure the new team member will fit your company culture.

Then you must consider the financial commitment you make when you bring another person on staff. Factor in salary, benefits, work perks (like gym memberships, wellness stipends, etc.), and you’re soon spending thousands and thousands on your in-house financing every single year.

But when you work with UCFS to provide consumer financing, you save all of this and more. Businesses only pay a fee when they finance a consumer, the UCFS team takes care of accepting repayment for the life of the loan, and handles client communication to ensure a great experience for your customers. And you don’t have to bring a new employee onboard to handle financing to serve more customers.

4. Consumption of Time and Resources

Setting up your own consumer financing program takes a lot of time, energy, and work. Many businesses jump into in-house consumer financing unaware of the drain it can be on their resources.

Often, it’s small businesses and start-ups that try to manage their own financing programs. These business owners already wear many different hats in establishing their companies and helping them thrive. They don’t have the mental or physical energy to manage in-house financing.

According to one study, 63 percent of business owners work more than 50 hours per week. And the majority of those hours (nearly 70 percent) are spent putting out fires and managing day-to-day operations. Business owners typically spend less than 32 percent of working hours strategizing business growth.

That’s where United Consumer Financial Services comes in. The team at UCFS takes the burden of customer financing off your shoulders so you can focus on strategically growing your business. Spend less time on managing your in-house financing and spend more time on cultivating your business.

5. Legal Risks

Certain legal risks exist when a business runs their own consumer financing program. When companies set up their own financing programs, they likely want to charge interest on customer payments. But if they don’t follow usury laws, they could fall into serious trouble.

Each state has its own usury laws that govern interest rates on things like financed payments. And if you have out-of-state customers, your business might be subject to those laws as well.

Running your own financing program isn’t as straightforward as it seems. You’ve got to follow –– and be aware of – the many financing laws and regulations to legally provide these solutions to your customers. If you don’t, you’ll find yourself in significant legal difficulty.

But when you choose consumer financing options from a trusted firm like UCFS, you don’t have to worry about red tape or confusing legal jargon. Our team has over 40 years of experience to provide you with legal financing solutions that allow your customers to bring home the products or services that they need and want. And our helpful US-based customer service department can quickly answer any questions as they arise. We execute your consumer financing program so you can spend more time on customer care and business development.


Consumer financing takes time, know-how, and energy to function successfully. Trust the team at United Consumer Financial Services to take care of your financing program. We ensure your program runs smoothly and that you and your customers have a great financing experience.