Offering your customers a means to finance their purchase has many benefits for you as a business owner.
For example, customers are more likely to make a purchase when financing is available. Plus, they're more inclined to increase how much they spend at one time when aided by financing. Additionally, offering this resource builds trust and appreciation between the customer and your business, which will encourage both repeat and referral purchases.
But if you've never offered financing before, it can be tough to know how to seek out the right company for your business. Be sure you know the right questions to ask before forming a partnership with a financing company.
Every industry has its own particular nuances. Make sure that the company you're pursuing has experience working with other companies similar to yours. For example, a home improvement contractor would benefit more from seeking out a company that has experience working in construction than one that mainly works with auto financing. A construction financier will be more familiar with your business model, your typical customer and the risks associated with the projects you're likely to take on, Entrepreneur contributor Ryan Himmel pointed out.
When choosing a financing company, you need to know that it is willing to work with your customers. Find out whether they have a minimum credit score the company will work with and what other qualifications it requires.
"You need to partner with a financing company that is willing to work with your customers."
You know your customers better than any potential financing company partner. If a company you're talking to only accepts customers with excellent credit scores, but you know that some of your audience has fair scores, consider broadening your search. While offering financing is generally a good thing, it won't do much to benefit you if the company isn't willing to work with your client base.
Additionally, find out if the company offers any special promotions, deals or discounts to your customers. Options like same-as-cash financing, deferred payments and low APRs are attractive to many customers, and qualifying for them will benefit both your business and your clients' finances.
Looking to other people's experiences with the financing company will be a good compass to determine whether it's the right fit for you. Look online at their website and at the Better Business Bureau. A testimonials page is a good sign, but checking out ratings and reviews on the BBB website will give you a good idea of what people are saying about that company as well.
ForConstructonPros.com suggested looking at competitor websites as well to compare and contrast testimonials, offerings and other valuable information. However, keep in mind that company websites are biased, and comments about one's own company or someone else's might not tell the whole story. Be sure to do thorough research before choosing a financing company.