Now that every business owner is offering financing options to their consumers, you’ll need to follow the trend if you want to compete favorably with you counterparts. Customer Consumer Financing is becoming an effective tool for increasing returns. And the good news is; First American Merchant is offering a number of lending programs to help both large and small businesses cater for their customers. Some of the benefits local businesses enjoy from these financing programs include; improved acquisition, brand awareness, consumer retention, and increased foot traffic. What’s more it builds customer loyalty which greatly impacts repeat business.
Most customer financing lending programs offer your consumers three levels of funding;
Primary Programs
Primary consumer finance programs are funding options that may as well be described as a customer’s “first option.” These are offers you access before being provided with secondary/sub-prime programs. They are often great loan terms, with extra benefit of lower merchant fees, and reduced risk for the lending party. Even though primary programs are ideal options for both retailers and buyers, getting approved can be very difficult especially if you have bad credit.
For that reason, only a smaller portion of your consumer base will access primary offers, and you’ll often need additional packages like secondary programs and tertiary lending to increase sales through customer financing programs.
Sub-Prime/Secondary Programs
Some lenders offer no-risk secondary financing solutions including several non-recourse loans for merchants. Because many customers often qualify for sub-prime funding, these programs assist much more individuals than primary financing.
While you can easily get approved for secondary programs, your customers must fulfill the lender’s requirements such as providing documentation to prove their income and residence.
No-Credit-Check Programs
These are special lending programs that don’t look into consumer’s credit. They are meant to allow customers with poor or no credit histories to enjoy consumer financing in spite of their low credit scores. Though some primary and sub-prime consumers use this alternative to help fix their credit reports, No-Credit-Check programs work best for consumers looking to establish or restore credit. And while this financing program is more costly compared to others, lenders allow merchants to give the buyer a 90-day same-as-cash option so as to mitigate the additional cost.
Now that lenders like FAM have provided consumer financing alternatives for businesses of all sizes you can choose what’s perfect for your business and begin building customer loyalty.