Overwhelmingly, businesses from coast to coast are buying equipment, and using monthly payments to make their purchases fit into the balance sheet better. The old adage in business is to use other people’s money, and it’s been ringing true in a big way for several years now.

So if you own a business that sells to other businesses, let me ask you a question – are you offering your customers a financing option, and if not, may I ask WHY YOU DON’T?

I’m not really looking for an answer. I mean, we’re not physically in the same room right now, so I can’t hear you anyway. Besides, I’ve heard all the reasons before. And NONE of them make any sense to me. 

I’m going to spend this post and the next one talking about the reasons businesses don’t offer financing, and hopefully dispel them.

“I Don’t Want to Take the Risk”

This would be a GREAT reason to not offer financing… if it were true. But it’s not true at all. The finance company (that’s us) takes the risk. You get paid in full right away, like you always do. There’s typically no credit risk to you — program terms apply.

In fact, it’s very likely you’ve already dealt with an equipment finance company or a bank. And how did that go? Just fine, right? Well, it’s no different if you offer the customer our financing. 

“My Customers Don’t Want Financing”

Absolutely they do. Overwhelmingly so, in fact. I know this because more than 80% of all business equipment purchases are financed. Whether the customer got a loan from the bank, used a credit card, used a line of credit, or worked with an equipment financing company, you can bet right now you are selling tons of equipment to customers who financed it. 

Here’s the disconnect – many times, the customer paid you in full, but they got the funds elsewhere and you simply don’t realize they actually financed the equipment.

So if you OFFERED excellent financing right at the point of sale, doesn’t it seem logical that makes it easier to buy from you? 

Think about it, and I’ll be back next time with more. 

Again, this is generally for manufacturers, distributors, and/or dealers of equipment looking to offer their customers credit.

Your Finance Partner should be technologically savvy – This is a big one. But you want your finance partner to be up on the latest tech. One of the better things they can offer is a way for a customer to get instant financing quotes right on your website. This is seen very favorably by customers – the ability to get instant quotes is a big motivator in at least exploring the possibility of buying your product.

Does your finance partner know marketing, and will they help you close sales? – Here’s another biggie – how will your future finance partner help you close sales? You should ask them that very question, and get a satisfactory answer.

For example, if you asked me that, I would reply with something like “well, you know those instant website quotes we just talked about? My company will e-mail the quote directly to your prospect, but the e-mail will be branded with your artwork/logo, and your contact information. This way, if they were shopping, they have a definitive “takeaway” from your website that goes right to their inbox. Our studies show that mangers often print these e-mails, and we’ve seen them close deals months later”.

I should be in sales, shouldn’t I?

Make sure your finance partner is proactive – What do I mean by proactive? I mean willing to go the extra mile, or engage in things beyond simple “we finance” deals. I’ll get into these in more detail next time (see, I told you this would be 2-3 posts).

My last post discussed lead aggregators and how they were now popping up when companies searched for a finance partner. And I offered the advice that any finance partner you choose should be the actual company that provides the funds.

But that got me thinking – what else should you look for in a finance partner? Let me give you a few suggestions:

** Disclaimer – this is generally for manufacturers, distributors, and/or dealers of equipment, vehicles, and software. You know, stuff businesses use.

Ok, here’s my partial list (there will be two or three parts to this)

Your finance partner should have a track record – Johnny-come-lately is great for technology companies. Not so much for equipment financing, though. You want a company that has been in business at least a decade – there needs to be some stability there. And “trust” is huge.

Your finance partner should pay you fast – You want to get paid, so choose a finance partner that pays you quickly. Preferably on delivery and acceptance of your product (unless other arrangements are made).

Your finance partner should be easy to use for your customers – No brainer here. You do not want your customers jumping through hoops to apply for financing. You want your finance partner to generally do what’s called “application-only” financing for common deals. This means up to a certain number (say 150k), there only needs to be an application filled out – no financial statements or digging through old tax returns.

Speed is of the essence as well – Your customer does not want to wait around for days and weeks for an answer to their finance query. And you, as a vendor, do not want them waiting either (this gives them more time to shop around). So choose a finance partner that can give your customers an answer fast – preferably same day, if at all possible.

There, that’s a good start. More later.