As COVID influences how customers shop, retailers with online stores and ecommerce companies may consider adopting a financing platform, which can enhance customer loyalty and increase sales.
Continue reading for a comprehensive explanation of consumer financing, to explore your consumer financing options, and to discover the benefits and drawbacks. Or, skip to the section that directly answers your query using the navigation links below. Customer financing is a program or service offered by a business to help consumers pay for products, goods, or services over time. Primary financing refers to financing where a business acts as a lender and offers its own financing program to customers.
Primary financing is typically a more involved process for the business than third-party financing. Third-party financing refers to a type of financing where small business owners rely on a third-party financing provider to act as a lender at the point of sale. Third-party financing companies allow a wide range of credit to be approved compared to other, more strict forms of financing. In some cases, these financing programs are interest-free, while others might assess interest charges at set interest rates.
A few examples of products and services customers may want to finance include furniture, appliances, electronics, or home improvements and repairs. For in-house loans, you will need to pay costs associated with credit checks and collecting payments, which require both software and staffing, as mentioned above. QuickBooks Online accounting software can simplify the payment process with automated invoices and payment reminders. Using QuickBooks Payments, you can send customers pay-enabled online invoices and your books are automatically reconciled.
Third-party consumer financing has recently grown increasingly popular among businesses of all types, particularly online retailers. Popular online third-party financing providers include:. These third-party financers allow customers to apply partial payments toward the cost of the purchased items, and typically offer customers interest-free payment terms.
Installment payments are often due on a biweekly or monthly basis. Layaway is a payment plan where a business reserves a product for a customer until the customer pays for the item, typically with a series of partial payments. In contrast to other financing options, under a layaway agreement the customer does not receive the item until it has been paid for in full. However, not all partners charge this fee, so if you shop around, you can find companies that offer free registration.
Financing partners can also charge a monthly fee or a fee for the annual plan. The monthly fee may vary based on the number of transactions or on the tier you choose. But not all partners do that.
For example, Enhancify offers three levels of annual plans, and that's the only fee a contractor will need to pay for the benefit of offering financing to the clients.
Plus, there are financing partners who allow contractors to offset the fees they pay. Thus, Enhancify pays commissions for each closed deal, plus it pays for referrals. Offering customer financing is the key to growing your business and getting more revenue. You will look more professional and improve customer loyalty. But most importantly, your customers get the services they need. Plus, homeowners research financing options before investing in home improvement project.
So contractor financing for customers can open doors to more sales and bigger jobs to the benefit of contractors and homeowners. Enhancify Blog. ViaBill is another popular customer financing solution for shoppers to consider using on eligible websites. This platform is designed to split larger purchases into four equal monthly payments.
If you properly pay each of your four monthly payments, you will be paying no additional interest on your purchase. Customers can also be confident that ViaBill utilizes safe and secure servers to protect all personal information.
ViaBill is already integrated into more than 5, retailers and continues to expand to new platforms regularly. Website: Afterpay. Afterpay is an extremely popular selection for customer financing because of its incredible reputation with shoppers and retailers. Customers can split up their larger purchases into separate monthly payments with no additional interest. Late fees will only apply to customers that fail to pay their monthly bill on time. Customers may also be eligible to re-schedule their monthly payments a few times per year.
The Afterpay customer financing platform is extremely popular with online clothing retailers. Customers will certainly have a great opportunity to use Afterpay when making significant purchases on eligible retailers. Website: Affirm. The Affirm financing process is extremely simple to use. You can conveniently select their platform on checkout at an eligible retailer for an instant decision on eligibility.
If you qualify, you will receive your estimated monthly payment for your purchase. This platform is specifically designed for consumers that want to pay for their purchases at a later date. Customers can select their preferred payment date, and there will never be late fees or additional penalty fees. Website: FinanceIt. Instead of paying massive up-front costs, you can significantly reduce your initial costs and pay for larger purchases over a period of time. You will receive rapid approval decisions after completing your application.
The interest rates on your purchasing loan will vary based on your credit history. Website: United Consumer Financial Services. By discussing financing options throughout the sales conversation, you can demonstrate to customers how a large purchase can fit into their budget, which helps your business boost its sales and increase the average sales transaction size.
The information, views, materials and opinions contained in this article are for general informational purposes only, are not intended to constitute commercial, legal or other professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. FinanceIt Canada Inc. Although we make reasonable efforts to update the information regularly, Financeit makes no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.
We have a few quick questions to make sure our payment plans are the right fit for you…. Just a few quick questions to make sure our payment plans are the right fit for you…. Just a few questions to make sure our payment plans are the right fit for you…. Enter your information to make sure our payment plans are the right fit for you…. Complete the fields below and a sales representative will contact you within 2 business days. To make sure our payment plans are the right fit for your business, a sales representative will get in touch to ask a few follow-up questions.
Go back to Financeit. Grow Your Business Why should your business offer financing to customers? August 12, What is customer financing? Why you should offer financing to customers Here are the top business benefits of offering financing options to your customers: 1.
Be more competitive Offering consumer financing can give you a competitive advantage, allowing smaller businesses to compete with big-box stores.
Attract new customers Your business can attract new customers by offering consumer financing plans.
0コメント