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What is customer financing?
Consumer Financing breaks down the total cost of expensive goods and services, enabling customers to make smaller loan payments according to a set schedule. Rather than paying the full retail price at the time of purchase, customers make regular payments on a monthly, bi-weekly, or weekly basis.
In most cases, customers are charged interest as part of their loan payments. Interest rates vary depending on the terms of the loan, and in some cases, merchants will offer zero-interest financing as an incentive to potential customers.
Should you offer consumer financing?
Often called By Now Pay Later (BNPL) consumer financing does have some distinct advantages for a business and a consumer but is it right for you?
Let’s start with the fact that it is not free to you or your customer. So, the question is does it meet a need for your business. For example, are there times when a customer needs your product or service out of the blue and they’re not prepared? Or, they really want something but the price is just a bit out of reach? Those are really obvious situations where a consumer financing option would be a win-win as long as the process was easy, and the cost was reasonable.
In most cases, customers are charged interest as part of their loan payments. Interest rates vary depending on the terms of the loan, and in some cases, merchants will offer zero-interest financing as an incentive to potential customers.
What should you look for in a consumer financing program?
For the consumer, look for a program that offers multiple, flexible solutions instantly so a decision can be made right away. Rates and features should be transparent with no hidden fees. Approvals need to be swift, usually in less than five (5) minutes.
For you, make sure the program is a frictionless and seamless part of your sales and provisioning process. If there are fees charged to you, you may want to pass them along to the buyer. If so, be sure there is a built-in process to do that. If you have large ticket items that require installation over time, a pre-approval process might be needed. Last, make sure you are getting paid quickly and that there’s a strong support team if you or more likely your buyers need it.
How we can help you create a financing program for your customers?
We have 2 programs which may fit your needs.
- Delay Pay from GPI and powered by TUA technology.
- GoKnow from Know Technologies, Inc.
GoKnow from Know Technologies, Inc. You can use one or both depending upon the circumstances. To learn more, please contact us through our live chat, appointment scheduler, or call 899-966-6111 for free.
Bottom line
In today’s economic climate, many customers don’t have the funds necessary to make large purchases. Customer financing gives shoppers the ability to pay off large purchases over time while increasing their sales and transaction values.
