Why You Should Provide Financing for Customers
For many businesses that are looking to increase revenue, consumer financing can potentially be a good option. Although those with a small business may think that they have fewer options for doing this than a larger company, the reality is that there can be many ways that a small business may use business to consumer finance to increase revenue.
How Does Customer Financing Work?
The primary goal of customer, or consumer, financing is to encourage someone who is just looking around to actually purchase something. Business to consumer finance works by allowing a customer who may not have the money to make a purchase upfront to buy something with credit offered by the company, and then make smaller payments over time. Because a customer won’t have to pay the total balance at once, they may feel more encouraged to make more purchases, or a larger purchase than they normally would, instead of putting it off or waiting until they have the money saved.
Different Kinds of Programs
When it comes to customer financing, there can be multiple options. One of these is a primary program. This kind of program is typically offered to customers with average credit or above and may offer such things as a zero percent or low interest rate. The attractive interest rate can be appealing to many consumers, and these offers may pose less of a risk for a business because they tend to only be offered to those with decent credit. However, because only those with average credit or above may be considered it could limit the amount of customers it can be offered to. Another common type of program is a sub-prime program. This kind of program is usually offered to customers with lower or below average credit scores. This kind of program often entails a few more steps than a primary program, such as providing things like proof of residence or income. Although it may be a somewhat more risky program for a business, it tends to be more popular because a wider range of customers will often be able to qualify.
For a business that is looking to increase revenue, business to consumer finance may be a good option. While some may think that this kind of financing is meant more for larger businesses, those with a small business may also use it to gain revenue.
Whether you depend more on primary programs, sub-prime programs, or another type of program, using this kind of financing could prove beneficial for your small business.