If you read this blog, you’ll see I hit this topic a few times because I feel it’s an essential part of any business. But what spurred me to write today was reading an old blog from five or six years ago about always selling on a payment. 

I believed it wholeheartedly then, and I believe it now. Saying “You can have this for $1326 a month” is a lot easier to take than “It’s $75,000. Will that be cash or check?”

You can think whatever you want about auto dealerships, but they are the absolute masters of closing sales. And they learned the ultimate lesson decades ago: always sell on a payment. Always. 

Of course you will get that one customer who doesn’t need financing and wants to know the total cost, but the fact is almost everyone else buys a vehicle on a payment. 

It’s the same with your company and what you offer. Even if your customer doesn’t ask you about financing, I promise you a considerable percentage of them, likely well over 90%, are thinking “monthly payment”, even if they say nothing to you about it. They are going to Crest Capital, they are going to the bank, they are going to their rich-but-obnoxious uncle… they are going somewhere, and will make monthly payments.

But there’s another customer you never got to really talk to. Know why? They ultimately bought from your competitor because your competitor made it easy. Your competitor made it so they didn’t have to go to Crest or banks or uncles they really can’t stand… your competitor partnered with someone (maybe even us) to offer equipment financing right there at the point of sale.

Your competitor understood that offering financing cost them nothing. Your competitor understood that offering financing was ridiculously easy, and it involved no work on their end at all. Your competitor had “only $XYZ a month” right on their website. 

Your competitor made the sale. You never even had a shot.

Compete better. Offer financing. If you need help, we’re ready.

I can hear you saying “But Fletch, nobody talks about Section 179 early in the year. In fact, I never even think about it until the fourth quarter when I’m scrambling to get my equipment purchases in to make the deadline.”

And that’s exactly my point. Using Section 179 earlier in the year makes a ton of sense. Let me list a few reasons why:

You LOCK IN Your Tax Deduction

I’ve known companies who held off on a Section 179 purchase, opting to wait until later in the year. Then, for whatever reason, the purchase never happened, and they missed the deduction. Now maybe the reason was that the equipment delivery timeframes were too long to make it by year-end. But usually it was something minor, and acquiring new equipment got pushed a bit because it was another “thing” on the list. 

Making your Section 179 purchases early in the year guarantees you will get the deduction. If you plan to acquire eligible equipment this year, and you can acquire that equipment now, then you probably should. 

The Equipment Earns Revenue

In most cases, a Section 179 purchase is tied to earning revenue. Machinery,  vehicles, technology… these all earn revenue, most of them from the day you put it into service.  Having more months of revenue producing equipment at your disposal has no downside. You’ll still get the deduction, and you had the advantage of the equipment working for you all year. Not a bad deal. 

Not Rushing to Buy = Better Equipment Choices

When you are rushing to beat the deadline late in the year, your equipment options may be limited. Did you really want the bare bones model in “Mud Brown”? No? Then why did you wait? Because that’s all the dealer has left, and there’s no time left to order a different one. Take it or leave it. 

Note: they probably had 50 of them back in March. With all kinds of helpful options… in “Midnight Blue” no less! 

Wrapping Up

Section 179 is good on purchases made all year. But there are definite advantages to using Section 179 early in the year. You guarantee you’ll get the deduction, you can earn more revenue, and the selection is probably a lot better, especially since you’re not in a rush to buy.  

If you need it, get it. That’s my take! 

I’ve been on a pretty good roll – AI was the buzzword for 2023 just like I thought it would be, and I hit on one sports pick too. And rates pretty much did what I predicted as well. Now onto 2024. 

Sports first: for football, let’s go with a rematch of a super bowl of my youth: San Francisco 49ers vs. the Miami Dolphins. It’s not Dan Marino vs Joe Montana this time, but it should be fun. And in a reversal of last time, a Miami win!

*Note that I do write these a little ahead of time, so I hope both are still alive when this publishes!

In Baseball, I picked the Braves last year, and they rewarded me with a great regular season that crashed and burned in the playoffs. But not this year – this year our locals take it! For an American league finalist, let’s go with the Baltimore Orioles to take the next step and make the world series.   

Basketball… I hit with Denver last year, but this year I am going old school Celtics. They’ll beat Denver (who makes it to the finals again.) 

Hockey – the hardest to predict. The NY Rangers look mighty strong though, so that’s my pick. Let’s go with them vs the Vancouver Canucks in another old-time rematch.

Ok, onto economics: Rates are going to start to come down in 2024. How many rate cuts remain to be seen. The Federal reserve has said perhaps three, but I’m going to put a little caution there and say two. Last spring and mid-autumn.

I also expect the US economy to be fairly stable, assuming world events don’t get out of hand. I also think our presidential election in November to take a week to resolve. That seems to be the way moving forward. Hopefully you’re happy with the result! 

Ok, enough politics – onto more fun stuff. AI is going to continue to dominate, as it changes everything. We’re already seeing this in search engine results. I do expect a little pushback though as we become increasingly uncomfortable with certain aspects of it. For example, I just saw a new AI technology from NVidia that makes it so your eyes are always looking at the camera during a video call. Yea, neat… but also not real. So are we ok with what we are seeing not being real? It’s a weird area for sure. But I do expect the “fun and useful” parts of AI to be more prevalent than the creepy ones. 

We’ll also start to see AI combined with robotics, which will reshape entire industries. I was talking with a friend who paints houses, and he mentioned how hard steep roofs can make painting.  Then he said “I can’t wait to buy an AI controlled drone to do it”. It doesn’t exist yet, but he expects it to come. Maybe not this year, but we’ll start seeing things like that more and more.    

I’m pretty optimistic about 2024, and I hope you are too. If you look at how things truly are, and not how they are portrayed on social media, there’s a LOT to like. 

Bye 2023 – it was real. Hello 2024. Let’s do this.

Are you doing it? If the answer is yes, how much do you promote it? Because I have to tell you, over the years (and I know I sound like a broken record), I have seen it make a tremendous difference in the bottom line. In plain terms, offering financing closes more deals.

Now for those who are uninitiated, when I say “offering financing”, I don’t mean your company financing anything. I mean taking advantage of the free vendor financing program from Crest Capital that allows you to offer financing at no program fee and typically no credit risk to you — standard program terms apply. All you do is sell your goods like always, except you can also say “we offer financing”. Then we handle the financing part, and you get paid in full right away, like you always did. 

It’s simple, clean, and extremely effective.

It becomes even more effective in an apples-to-apples comparison with your competitors. If you offer financing and your competitor doesn’t, you automatically make it much easier to buy from you. Your customer doesn’t have to get their own financing (or use cash). You’ve also taken the “we can’t afford it right now” rebuttal off the table.

I mentioned earlier our program is free. That’s no joke – you don’t pay a penny for this. In fact, we’ll even brand it for you – supply us with your logo/artwork, and we’ll make you a professional, secure online portal that your customers can use on demand. And we’re fast too – in many cases, your customers can even get  financing approval before the sales meeting is over. Indeed, we’ve approved financing deals within hours, even from the trade show floor – a deal was made, lunch was ordered, and before the last sandwich was finished,  the financing was secured. Oh, and your customers will love our rates and terms too. 

So I ask you one more time: it’s summer 2023. Are you offering financing yet? 

The reason he was elated is because this type of transaction is typically an instant reject from most equipment financing companies. Most lenders – the bank included – simply do not like private party equipment financing deals. This includes machinery and other equipment, business vehicles, furniture, and similar. It doesn’t really matter what the equipment is – most lenders want to see a manufacturer or an authorized dealer as the seller.

Conversely, while Crest Capital looks at deals with a discerning eye, that eye is attached to a person, and we will consider private party equipment financing deals. It’s actually a pretty large differentiator in our industry, and allows us to stand alone. 

Now for the obvious question: “why don’t most equipment financing companies like private party deals?”

It’s simply an answer of both risk (to the borrower) and work (for the lender). And this risk and work involves ownership of the equipment and past liens. I have written about this previously in a post called What Is PMSI, and Why Is It Important in Equipment Financing?, which goes over the basic details. In short, it’s a tricky subject with a lot of moving parts and no guarantees, which is why I am reluctant to say anything definitive about it. 

But I can say that part of what makes an “authorized dealer” an authorized dealer is they generally do the legwork on UCC and title issues. This gives the buyer a bit of recourse in case the item has an old lien that nobody knew about or didn’t mention (and old liens happen more than you think.) Since the buyer can actually lose equipment that has an old lien (while still owing the lender money), a dealer will usually step up and take care of the buyer. Private sellers… not so much.

As I stated, Crest Capital is the only lender we know of that entertains financing equipment from private party sellers. But these types of deals do require a little more legwork and time (note: it helps immensely if the seller is the original owner and has all the paperwork.)  And not all of them are going to be approved. 

This all stated, if you do find a nice piece of equipment, the paperwork is there, and the private party seller is the original owner (or the line of ownership can be easily traced), bring us the deal. No promises but we’ll at least take a look! 

Here are a few specifics that we engage in with our finance partners who want to get more out of their financing program. First are two options that every partner has access to:

Widgets and a Custom Payment Portal.

A “get financing here” widget can be inserted into your website in seconds (it’s just a quick snippet of code). But the results can be profound. Prospective buyers looking at your goods can click to get payment info and apply for financing.

The custom portal is similar in that it’s easy to deploy. For portals, we can brand them with your name/logo, and can include a custom vanity URL. Prospects can enter in finance amounts, get quotes emailed to them, and even apply for Crest Capital financing directly from your portal. It’s a fantastic addition to any sales effort.

Ok, those are the common tools. But the following strategies are more advanced, and are selectively available to specific partners (e.g., those who prolifically utilize financing, and are willing to work with us as much as we work with them.)

“No Payments Until…”

Pretty self-explanatory. The option to defer payments until later can be an attractive one for buyers. We’ve done skip first payment, no payments until summer, no payments until next year… these can be customized depending upon our partner’s needs.

Seasonal Payments 

Many businesses operate seasonally. Examples include a golf course in the northeast, a ski resort, or any other business that has high and low seasons dependent on climate, seasonal tourism, the calendar, or similar. If you sell to customers like these, the ability to adjust payment schedules depending on the season could easily be the deciding factor to buy from you. We can make that happen.

Progress Payments

For many industries (especially those that provide customized goods), progress payments are a key part of operations. If you provide goods that require progress payments, we can work with you to ensure your financing program meets those needs. 

There are other advanced strategies, such as custom lease structures, special rates, creative marketing collateral, and more that we work with advanced partners on, but the preceding should give you a good idea what’s available. 

Again, these advanced strategies require partners to be experienced with offering financing, and in some cases, willing to assume some of the risk. But they can be extremely robust to the bottom line. 

Financing makes companies money – it’s as simple as that, and if you’re already a practitioner, upgrading your financing program to Crest Capital can make a big difference, both today and tomorrow. 

For example, I posted a “why aren’t you offering financing?” series in January of 2020. Just one month after I posted, we began hearing about a possible Pandemic. Then a month later, the pandemic happened. And you know what else happened? Credit exploded. With shutdowns looming, companies did not want to spend a dime of their own money, so they borrowed and financed equipment in droves. 

Like everyone else, we worked from home, but were quite busy. And you know what took up a TON of our time? Helping our best vendor partners better offer credit to their customers.  

We have hundreds of vendor partners. Every one of them is important. But there are a certain percentage of them who truly embrace offering credit and monthly payments, and use financing as a selling tool. They already know, beyond any doubt, that offering credit raises sales. So they proactively employ it.  

For those vendors, our help was there for the asking. We worked with their salespeople, helping them better present financing. We assisted with marketing collateral. We worked out “as low as” price points for their websites. And for the most prolific ones, we worked out special payment schedules and similar. 

This all mattered immensely to our best B2B vendor partners. When the pandemic hit and business seemed quite “iffy”, we helped them take advantage of the sudden increased interest in credit, and for a great number of them, sales held serve during a very challenging time. 

So this begs a question to companies who already embrace offering credit: How much does your finance partner actually help you?  

At Crest Capital, we see it as a true partnership. A two-way street if you will. 

Many vendor partners don’t really want to push credit, and that’s ok. We give them some self-service tools, and financing is there if they need it.

But there are other vendor partners who proactively view credit as a vital sales tool (which it is). And together, we do some interesting, revenue-driving things. 

Do you have a vendor partner now, but haven’t seen much interesting (or revenue driving) lately? Maybe it’s time to talk to a vendor partner that actually does those things. 
I’ll discuss specifics in the next post, but suffice to say, if you’re interested in more revenue from your financing program, then we’re interested in talking to you.

*For those who don’t know, Section 179 allows businesses to write off the full price of qualifying equipment (which is almost anything a business can use), up to a little over $1 million dollars. It’s good for any qualifying equipment purchased and put in service during the tax year.

One reason I mention Section 179 so often is sooo many companies do not know about this tax deduction. Believe me when I tell you, eyes are opened wide when we explain it. The conversation usually goes like this:

Wait, you’re telling me I can write off the entire $50k of this purchase? That means (does math) I will save $17,500 in taxes. Is that true? 

Yes, that’s absolutely true (the above assumes a 35% tax rate). 

So my question to you is this: if you sell to businesses, are you telling every single customer about this? And if you aren’t, why not? Because I’ll bet anything a good number of them are NOT aware of this. 

Telling a prospective customer they can write off the entire price (thus knocking whatever their tax rate is right off the true cost) can very quickly turn a “no” or “maybe later” into a full-on “yes”. Any good salesperson will salivate when told a customer doesn’t know about Section 179. 

Here in 2021, there’s an added incentive: as I’ve been mentioning time and time again, supply chain delays will have an effect on Section 179 – you need to get the equipment and put it into service. So having equipment in stock and ready to ship is a HUGE selling point.

If you sell to businesses, and have stock ready to ship, I can think of no better incentive than making prospective customers aware of Section 179, and you can get them their equipment in time to take advantage of it. 

Section 179 is a great sales tool. Use it.

In my previous post, I discussed how easy offering financing was for equipment sellers, and how it was literally plug and play. Then I talked about being proactive about it.

In this post, I’ll go one step further and discuss a few ideas on how you can be proactive about offering financing to B2B customers. None of these take a lot of work, but they can all have an extremely positive effect on your sales. Note: I am certain I discussed these in this blog before in some form, but it was at least a few years ago.

Offer Financing Right at the Point of Sale 

On your website’s product page, mention there is financing available. Better still, put our widget there, and your customer can quickly and easily get a payment quote. Also, right on any product collateral, make sure you put “financing available” pretty much near each product. 

The above is pretty basic, and requires very little work or upkeep.

Give a Payment Amount

This is similar to the above, but it puts a number on it. We often work with vendors to come up with a payment based on the cost of the equipment and term. So “financing available” can become “as low as $XYZ a month”. 

That’s really powerful marketing. Think about it: people are looking at your products because they are interested. Showing them how affordable it can really be always has a substantial impact on buying decisions. Especially if your competition isn’t doing this. 

Now, this does take a little more effort, because when you raise your prices, it needs to be adjusted, but we have found it’s well worth the tiny amount of effort it takes.

Get Your Salespeople on Board

I just did an entire post on this called “it’s a question of closing”. But let’s repeat the thought, because it’s low hanging fruit. Trust me, your salespeople are already hoping for something like this. If they’ve been around the block, they know how powerful monthly payments are at closing time.

Get More Creative

Do you want to get really proactive? We work with B2B equipment sellers to offer things like “no payments until next year”, “skip first payment”, or similar. These are a little more advanced, but again, they can really boost sales, and that’s what it’s all about, right?

Listen, offering financing to your B2B customers is great. And it’s even better if you are proactive about it. 

The other day, I had a prospective vendor tell me “look, I know you say offering financing to my B2B customers is easy, but that’s not enough. I literally want to plug it in and be done with it.”

I have two responses to that:

The first is, that’s exactly how easy offering B2B financing is. You can literally “plug in” our widget onto your website. It’s just a snippet of code. In other words, one minute of cut and paste, and that’s it – that can be the end of it for you. 

From that point, your prospective customer sees your goods, and sees “financing available”. They click on that, and from that moment forward, the transaction is no different than if the customer came to us on their own. We get to work and get the funds, you make the sale, get paid, and that’s that.

So yes, it IS literally plug and play.

But as I said earlier I have two responses. Here’s the second:

Ok, it’s plug and play and easy and you can be totally hands-off once we get started. That’s great. But I would encourage you to promote financing and payments as much as possible. Be proactive about it – our most successful vendors make “monthly payments” a key part of their marketing strategy. Don’t you want to be more successful? This is an easy way.

Mind you, being “proactive” in offering financing to your B2B customers does not make it harder for you in any way. It’s still “no work” on your end as far as the transaction itself goes. It can be as simple as adding “monthly payments available” to your website and collateral. And instructing your salespeople to use monthly payments to overcome price/budget objections.

Offering financing to B2B customers is as easy as you want it to be. But while it’s “no work”, I also encourage you to be proactive in marketing it.

There will be one more post on this (for now, anyway) where I’ll go over some of the ways you can promote offering payments.