I’m happy I did. I’m of the firm belief that selling cars is fantastic training for almost any businessperson, especially in any sales activity. It teaches you to work with people, handle rejection, and follow through. But, to me, the biggest thing selling cars taught me is to ALWAYS SELL ON A PAYMENT.

Selling on a payment is something I’ve taken with me my entire career, and I have seen it work across any industry you care to name. There is no seller of equipment, vehicles, or even software that would not immediately increase sales by proactively offering a payment option.

This due to two reasons:

#1 – Selling on a Payment Takes Price and Affordability Out of the Equation

Telling someone the equipment is $45,000 can sting. Telling them “it’s $45,000 and we can get it to you at around $825 a month” is much better. Better still is simply saying “you can have it for less than $850 a month”.

#2 – Almost all Equipment is Sold on a Payment Anyway

Even if your buyer never mentions it, they are probably going to the bank to fund their equipment purchase. More than 80% of all equipment sold is financed in some way.

Bonus – Here’s Why You Have Price Objection

Ok, so if I establish that 80% of all equipment is sold on payments anyway, why didn’t you make the sale? After all, they could have gone to the bank, right? I am convinced that most price objection stems from the fact the bank can be really tough to work with. It’s not an objection of your price, but a rejection of the bank’s difficult loan process and yet another restrictive blanket lien they insist on. In other words, they like your product, and could take out a loan… but it’s not worth the trouble or more restrictions.

But What If You Could Offer EASY Monthly Payments Right There?

That’s exactly what Crest Capital does for our Vendor Partners – give them an easy way to offer monthly payments, great rates, a fast approval process, and no restrictions.

But even with all of that, it still won’t work as well as it could unless payments are offered, and offered EVERY TIME.

So there’s my advice – Use payments every time. Include a “ask us about easy monthly payments” on every piece of marketing collateral. Put an “easy monthly payments available” in your e-mail signature. Work with your financing partner (us?) for a way to make things simple. At Crest, we offer our vendor partners an easy online application portal that’s free, and literally takes 5 minutes to install.  And it’s a serious sales booster, especially when it’s proactively offered.

Bottom line: if sales are soft, and you’re not pushing financing, that’s on you. Because there’s an easy way to fix it.

One thing that’s always interested me is using equipment financing to help close sales.

I see this up close, because besides offering financing directly to end users, my company also works with equipment manufacturers and distributors, providing financing to their customers (so when you look to buy a new widget and see “financing offered” on the manufacturer’s website, that’s almost always through a company like mine.)

In business-speak, these companies we work with are our “vendors”. And I find there are generally two types of vendors:

Passive Vendors: These vendors generally offer financing only when the customer asks for it. Maybe (just maybe) they’ll put “financing available” on their website. But that’s about it.

Active Vendors: These companies see financing as not just a convenience for their customers, but also use it as a sales tool, offering “monthly payments” every chance they can, be it on the website, in sales literature, at the trade show booth, in face-to-face sales calls, and more.

To me, passive vendors are like shoe salesman. They sit back and wait for the customer to come in and say “I want that”. Now, no offense to shoe salesman, but the profession is somewhat portrayed negatively in popular culture – always the more or less underachieving guy who accepts whatever scraps life gives him. That’s a passive vendor – always wondering why sales aren’t what they should be. Well, maybe stop being a shoe salesman and start using the tools available to sell more?

I say this because I see a huge difference in active vendors. They always seem to be doing better than passive vendors, in any economy. That’s because they are proactive – they see equipment financing and monthly payments as a way to sell more. And they use it.

Here are some ways active vendors use equipment financing to close more sales:

• Big and bold on the website. Every piece of equipment has a price, and something like “financing available” or even “as low as xyz a month”.
• They mention Section 179, and how it fits like a glove with equipment financing.
• They offer deals and financing on last year’s models to move inventory.
• They offer to take trade in’s on older equipment, and yes, my company can finance the new equipment, as well as the old when it’s offered for sale.
• The reps talk financing at sales calls and the trade show booth.
• They offer special financing deals, like “no payments until next year” or custom structures, like “no payments in winter” (for a northeast golf course). Yes, a good equipment financing company will offer these things to proactive vendors who want to use them.  

Ask any salesperson – the #1 objection to any sale is price. Equipment financing and monthly payments can eliminate that objection. It’s the ultimate deal closing tool, and active vendors and successful salespeople use it to its fullest.

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).

Naturally, these companies would like to offer credit. So they look on the web for companies like mine that they can partner with in offering credit. So far, I’m likely not telling you anything new – I have discussed this before in The Lease Guy blog.

But here’s something interesting I have found out. Many of these places that businesses turn to in offering credit are nothing more than lead aggregators. In other words, you, as a small business, are looking to offer credit. You find a company who says “sure, we can offer your clients credit”. Everything seems fine, but in reality, this “credit company” turns out to be nothing more than a form that captures your customer’s name, and sells it to hundreds of credit companies.

So here you are, thinking you are doing your clients a favor by proving a means to get credit, when in fact, you are increasing their spam. And subjecting them to endless phone calls.

This is somewhat troubling, because typically, “lead aggregators” used to be more consumer-based (mortgages and car insurance and such). In fact, I even blogged about this a few years back. But now they have moved to preying on B2B businesses.

So here’s what you need to look for – the company you partner with in offering credit needs to be the company who does the actual lending. No middlemen. If you have a “get financing through company xyz” button on your website, then company xyz needs to be the one providing the funds. That’s how my company does it, and it’s how all honest equipment financing companies do it.

Now I want to expand that into my world, equipment financing.

Equipment financing / equipment leasing via a company like mine has been around a long time. However, in days of old, my company would work with people via phone and fax. And we really didn’t have the ability to easily “partner up” with other companies and offer their clients credit – it took meetings and phone calls (in other words, a manufacturer couldn’t just decide one day to offer credit through our company. They had to call us, setup a meeting, people would fly to other cities to shake hands, and so on. It took weeks.)

But today, it’s totally different. In fact, it’s easy for any company to offer credit to their customers, and it can be setup in a few minutes.

Let’s say Company A makes widget machines, and feels they can increase sales by offering credit. So they call or e-mail my company and say “hey Fletch, can we offer credit through you?” In five minutes, I can determine if they are a business that we could work with (and since equipment financing companies finance all manner of equipment, the answer is almost always “yes”).

So, after an initial e-mail or phone conversation, how long do you think it takes to set this up, complete with a website payment portal? Would you believe another five minutes? Literally, that’s all it takes to set up a “get credit here” payment portal on Company A’s website. In less time than it takes to eat lunch, a company can decide “hey, we’d like to offer credit” and actually go through the entire process of offering its customers “one-click” equipment financing on their website.

Isn’t that amazing? We’ve gone from credit being impossible to offer to “click here for instant financing”. I love the internet. Especially when I’m whipping out my credit card and buying stuff!!

You may have noticed that I talk about equipment financing and equipment leasing from the end-user perspective a lot. This is probably because in most people mind’s, this is what equipment financing is all about.

However, there’s a whole other aspect of equipment financing and equipment leasing that I don’t discuss that often, and that’s the vendor side of equipment financing. In fact, it’s probably a larger part of my job than the borrower / end-user side. So in the coming weeks, I’m going to touch a little more on the vendor side of the equipment financing equation (because not only do I find it interesting, I think business relationships that involve credit will be a big deal in the next few years.) And today, let me give you an overall primer.

Essentially, for every equipment lease written, there are three parties involved: The company leasing the equipment (the end-user), the equipment leasing company (that would be me), and the company making / distributing / selling the equipment to be leased (the vendor).

Sellers of equipment, vehicles, and the like need a “finance partner” to help sell their goods. For example, it’s virtually impossible to sell cars without offering point-of-sale financing for the customer. Hence, auto dealerships partner with the manufacturers’ finance arm as well as other outside finance companies and banks.

But what about other equipment manufacturers and distributors – how do they fit into this? Should a distributor of, say, large office machines rely on cash to move their goods? Of course not! It’s beneficial to them to offer easy equipment financing (or equipment leasing). Thus, they have a few options – they can partner with banks (which is becoming more difficult), they can rely on “in house” financing (either through a parent company or the manufacturer), or they can partner with an equipment financing company like mine. Increasingly, the third option is becoming more and more attractive. Especially since the friendly local banks aren’t as friendly as they used to be.

In the current economic climate, I firmly believe that it will benefit many companies to look towards independent equipment financing and equipment leasing companies to help sell their goods. They do this by either by partnering for the first time, or looking to change their equipment financing partnerships because the bank closed the vault (and took away the lollipops… the fiends!)

For now, my only point is to introduce that “third party” (the vendor) that I have ignored in this blog for so long. Look for some deeper vendor-related topics in the coming weeks / months.