Businesses benefit from offering simple financing solutions to their customers: financing helps companies land bigger contracts, close more sales and increase their average transaction size. Offering a financing program can help your business attract new customers and earn repeat business, because financing gives your clients a flexible and convenient way to pay for large purchases.
Customers don’t always have the cash to pay upfront for big-ticket purchases or to cover the cost of major repair jobs when emergencies arise. By offering financing options to your customers, you give them the flexibility to make regular loan payments toward their purchase, which gives them more purchasing power.
What are the benefits of financing?
Both consumers and businesses benefit from financing programs, because financing gives customers more buying power and flexibility, and it helps businesses boost sales and improve cash flow.
Here are the top five benefits of financing:
1. Boost sales
Financing can help your business close more sales by giving customers the flexibility to make regular loan payments that work with their budget constraints. By introducing financing options at the beginning of your sales conversations, you can eliminate the biggest barrier to closing a sale: the high purchase price. Customers appreciate financing because it gives them more buying power, enabling them to get exactly what they want without having to pay the full price up front. A recent Forrester study found that when companies began offering a point-of-sale financing program to customers, their sales increased by 32 percent.
2. Increase average order value
You can use your financing program as an effective tool for up-selling customers, which can help you drive up your business’s average order value. To help increase your transaction sizes, just show customers how a slight increase in their monthly loan payments can allow them to get the upgrades they want. For example, if you’re providing a quote for a kitchen renovation, you could explain to the customer that for $20 more per month, they can upgrade from a marble counter-top to soapstone.
3. Improve cash flow
You can boost your business’s cash flow by using a third-party lender like Financeit. Once Financeit approves your customer’s loan, you’ll receive the full purchase amount in your bank account within a few business days. Not only does that help your business maintain a healthy cash flow, it also ensures your company doesn’t assume any risk associated with financing. You can relax knowing that you’ll always get paid, while we manage your customer’s regular payments. Even if your customer misses payments or defaults on the loan, you won’t be held accountable for the money.
4. Attract new customers
When businesses offer financing programs, they grow their potential customer base by making their products and services affordable for more consumers. Not everyone has the cash on hand to fund a large purchase up front, like furniture or home renovations. Financing breaks down large purchases into manageable payments that more people can afford, which widens the pool of potential customers available to your business.
5. Earn repeat business
Your financing program can encourage customers to return to your business for future purchases, building brand loyalty and helping you increase your revenue. Once customers know that you offer financing and understand how it can benefit them, they’re more likely to return to your business the next time they need to make a big purchase using financing, rather than going to competitors that might not offer the same financing options.
Your financing program can offer great value to both your business and its customers, helping you close more sales and helping your customers get exactly what they want, without blowing their budgets.
Boost your sales by offering your customers financing.
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