Consumer financing is an arrangement that allows customers to pay for goods weekly or monthly, making the products more affordable to the buyers. Consequently, this leads to increased sales because a more considerable percentage of the population is able to buy the goods. Small businesses have not been able to achieve a balance between offering customer financing and adhering to consumer credit laws. However, that has changed with time, thanks to the transformations in financial technology services.
Why is Consumer Financing Important?
There are several benefits to reap from this technique, and that is why many businesses today are focusing on the available options. Such benefits include:
Increased Sales – Once your business embraces customer financing, you will realize your sales will start to increase, especially those of large-ticket items. Nothing motivates your customers better than the option to make partial payments for goods, considering we are amid a pandemic.
Enhanced Cash-Flow – Your lender carries the defaulted payments burden while you keep your business cash-flow in check to support the financed sales. That is because you get the full payment once the loan has been approved.
More Customers – Research shows that businesses that offer consumer financing have 20% to 30% more customers than those that don’t. Therefore, you need to start offering this service to avoid losing your buyers to competitors.
It’s Free – Well, in some cases, you might incur a monthly cost for offering customer financing services. However, there are several aggregators out there who offer this service without charging any transaction fees associated with your credit card.
More Loyalty – The business you conduct must impact your clients and evoke loyalty and trust. Offering consumer financing options to your buyers will make them loyal and trigger them to refer their friends and family to your business.
Increased Sales Value – Besides the increased sales, offering customer financing increases the average order value of a sale. In most cases, consumers do not know how much they are eligible to borrow, and once they know that, they will probably spend more than they had initially planned.
In Conclusion
If you feel lost, do not hesitate to seek further assistance. Contact Capital Funding Source today to get clear guidance on the available funding solutions and digital marketing strategies.