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. 

I can tell you what it’s not – it’s not taking finance payments on a kidnapping ransom (admittedly, that was a lame joke, but us equipment finance guys aren’t know for our quick wit… still, not bad for two seconds of thought!)

Anyway, Captive Financing is when a company – say a vehicle or equipment manufacturer – creates their own financing company for the purpose of differentiating themselves from the competition. The thought is, if you have the financing in-house, and it only takes a trip into the finance guy’s office, the likelihood of a sale increases. If nothing, consumers (and businesses) like convenience. And buying something and getting financing right then and there is attractive.

However, a lot of companies have had trouble with their captive financing over the years – essentially, it hasn’t always proven profitable. One reason – at least in this finance guy’s opinion – is the overall focus of the company is to make product, and then make sales. The focus isn’t on financing. In short, financing equipment is not usually an equipment manufacturer’s forte’. Thus, the equipment financing end suffers some – it’s mainly there to help the sales end, and little more.

Well, I’ve seen a trend lately. Without mentioning any names, I’ve seen some of the smaller, lesser known captives cease to exist, and I have heard rumblings that some name ones might throw in the towel. And you know, that’s probably a good thing. Companies like mine are perfect to pick up the slack, with little effort from the manufacturer. In fact, equipment financing companies like mine have made doing business with them so simple that the manufacturer can have the same office, and even the same finance guy as before. Just the credit application goes to an equipment financing company instead of the in-house financing company. And the purchaser? They still get a great rate and fast approvals.

It actually makes a lot of sense. I mean, companies hire ad agencies, marketing companies, etc. Why? Simple – it’s cheaper and easier to hire out than to do it yourself. It’s the same thing with an equipment finance company – better service, and much easier.

There’s really no difference… well, ok, ONE difference: We won’t lose anybody money.

Actually, the terms passive and proactive really don’t pertain to the equipment financing itself – they pertain more to the vendors (manufacturers / distributors / dealers). And the terms aren’t official either – there’s no “passive vendor” entry in the equipment financing dictionary (actually, there’s no equipment financing dictionary, but I digress.)

Ok, here’s what I mean by these two:

A “Passive” vendor in regards to equipment financing is one that does not view equipment financing as a given. Simply put, it’s not expected in their industry. Software developers are a good example to use here. Software developers typically sell their software for a one-time licensing fee – the very notion of financing software (or software leasing) is pretty rare amongst industry executives.

A “Proactive” vendor in regards to equipment financing is one that not only embraces equipment financing, but also must provide such if they want to compete. Offering a monthly payment plan is simply expected by buyers. Automotive Dealers and Office Equipment suppliers are two good examples. Woe to the copy machine manufacturer that doesn’t offer copy machine leasing terms.

Ok, now you know the difference. Really, it’s no more than mindset. There’s no good reason for a passive vendor to remain passive (it’s nowhere to be found in the equipment financing rulebook, which is kept in the same place as the equipment financing dictionary.) In fact, offering a monthly payment option can be a HUGE edge in regards to marketing and sales. Especially here in 2010, where every dollar counts.

I would urge all “passive” vendors to take a look at partnering with an equipment financing company. It could really make a difference this year – in fact, in my experience, vendors that are “new” to equipment financing almost always experience a spike in sales because of such. People like monthly payments, and businesses are no different.