5 Tips to offering financing for customers

by Darwin on September 2, 2018

Customer financing is where a business allows its customer to acquire its products and services without having to pay for them beforehand. Today, many businesses are using this option as a way of winning customers and also as a way of making their customers loyal to the business.  The way customer financing works is that the customer does not pay but rather a third party pays on the behalf of the customer. In other words it’s like inventory financing where the third party pays for the service or product upfront then the customer will pay back the money in installment on their agreed payment plan.

  1.    Notify customers on financing options available

This is typically the first step that you need to carry out. In most cases, the customer will have picked out the product or service which they want to purchase. Once this is done then the next step is to make sure that they know the financing option that your business has to offer.  The customer here now has the option of deciding which financing program suits them.

  1.    Make sure your business is eligible for financing

Consumer financing is not offered on all product and services, it’s important to make sure that the product or service which you are offering your customers are eligible for the financing plan. In most cases, the product and service which are eligible are the ones which is expensive and costly. There are times that the financing company may put a minimum cost threshold. Make sure that the customers have this information beforehand.

  1.    Choose customer friendly financing programs

There are very many customer financing program and options and each has its own terms and condition. This calls for a better understanding of your customers. Align your business with financing programs that will not make it hard for your customer to sign up and get approved. There are a company which looks at the customer credit rating. Look for a company which is lenient or matches your target customer.

  1.    Choose a cost-friendly option

When choosing financing companies for your customers it’s important to choose an option which is not expensive not only for you but also for your customers. Many of the companies which offer to finance do so at a fixed monthly rate to the merchant. It’s important to look for a company which won’t charge you a lot as this would lead to you transferring the cost your customers.

  1.    Easy set-up

Another very important tip to offering your customers financing options is to choose the ones which are easy to set up. Different financing program comes with a different setup requirement. There are those which are quite complicated and some which are easy to set up. Your customer will want something which they can set up in a few minutes and make their purchase. The easy set up can also be flexible payment plans which can be done in installments. You can choose financing options which offer different repayment plans and flexibility like the use of smartphones.


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