Part of running a small business is continuously looking for ways to improve your customer’s experience. This includes offering a variety of payment options for convenience in acquiring your products and services. Credit cards, debit cards, checks, bank transfers and, yes, cash are the most popular forms of payment (reports show that cash still represents at least 30 percent of all transactions conducted at point of sale).
For many businesses, high average ticket prices ($500-$2,000 and up) can be a problem for business growth. Consider the fact that over 40 percent of consumers don’t have a credit card, 20 percent don’t have a debit card and almost 18 million don’t have a bank account. Without adequate credit lines or available cash to cover the transaction, you can see how your business’ high average ticket prices can lead to lost sales. This is where consumer financing comes in.
The Benefits of a Consumer Financing Program
Consumer financing programs are also known as “customer financing” or “retail financing” programs. Essentially, consumer financing allows you to provide customers with an affordable monthly plan to finance transactions. A big advantage for both the merchant and consumer is that these loan approvals can take place in minutes at the point of sale. This program allows customers to apply for a 6-24 month installment loan. Keep in mind, a consumer financing program will involve a fee upfront and/or a monthly service fee for you (the merchant).
Some of the many benefits of a consumer financing program include:
- Increased Sales – Consumer financing programs are the perfect marketing tool to attract more customers. Consumers will be happy to shop with you knowing they can spread out the costs and their less than stellar credit rating is not an issue.
- Risk Management – When merchants attempt their own in-house financing for customers, they completely shoulder the burden when the customer falls behind on payments. With consumer financing, on the other hand, the risk is no longer on your business (it falls to the organization that financed the customer).
- Competitive Advantage – Since many of your competitors likely don’t offer this financing option, you can take advantage of a great opportunity to gain the upper hand.
Interested in adding a consumer financing program to your list of payment options? Consider First American Merchant’s services. FAM’s retail consumer finance program ensures businesses achieve a high applicant approval rate, sell affordable payments and attract new customers, all while growing their business’ sales. A big advantage of working with First American Merchant is the fast, simple and hassle-free application process. The application itself only takes a few minutes to complete and requires minimal documentation. Merchants also enjoy same or next day approvals.