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How to Offer Customer Financing Without Breaking the Bank

Today’s consumer lending environment is rather complex. The reason has to do with ever-increasing customer demands, regulatory changes, and the revolution brought about by the digital world.

Offering financing options to consumers helps businesses obtain one of the most effective tools for increasing revenue. Since there are a variety of lending programs that can meet the needs of different consumers, both large and small businesses have access to financing that fits the needs of the most of their current and future customers. Consumer financing programs are also great for local businesses competing with large-scale department stores.

Benefits of Customer Financing

According to a recent study by Forrester, offering this type of alternative payment option can lead to a 15% growth in average order value and a 17% growth in incremental sales.

When a leading financial services company conducted a survey, 80% of respondents confirmed that offering financing strongly impacted their decision to buy from a specific retailer, with 48% spending more as a result.

Customer financing can help a small business’ average order size increase 120%. About 2/3 of customers make an additional future purchase of $500+ in stores they receive customer financing from.

Consumer Financing for Merchants

Small business owners are looking for ways to offer their customers financing. Merchants should find a reputable business funding provider like to turn for consumer financing, including medical consumer financing. First American Merchant has developed a solution that offers merchants an unmatched opportunity for growth. FAM, which is also a respectable payment processor, boasts an A+ rating with the BBB and specializes in the high risk industry.

Customer financing enables customers to be enrolled in an affordable monthly payment plan, so they won’t be obliged to pay all at once.

When considering a new customer financing program, the following is important:

  • Cost to the merchant to offer customer financing
  • Will your customers and goods qualify for financing
  • Will your customers like the financing
  • Is the customer financing easy to implement and scale

Financing companies usually charge merchants this way:

  • No charge
  • Discount rate
  • Flat rate

Customers usually consider the following things valuable to them:

  • Cost of financing
  • Financing flexibility

3 Levels of Funding Offered by Consumer Financing

Consumer financing usually provides customers with the following 3 levels of funding:

  • Primary Programs

These are associated with the most attractive loan terms, and offer decreased merchant fees and lowered risk for the lender.

  • Sub-Prime Programs

Depending on the provider, these can also be a no-risk solution, with many non-recourse loans available to merchants.

  • No-Credit-Check Programs

These offer no credit requirement, and are aimed at providing funding for consumers with damaged or unestablished credit histories.

With First American Merchant, you can offer customers 3-, 6-, or 12-month financing. You get paid the purchase amount within 3 days. There is no risk to you if the customer doesn’t pay. Your customers can finance up to $5.000.