Consumer financing is a method of allowing businesses to offer their products or services to the public before they have earned enough profit to pay for them with their own money. It also allows consumers to enjoy the benefits of something before they pay the total price, making it an exciting opportunity that has changed how people do business. Here’s what you need to know about consumer financing for businesses and how it works.

Offering Financing to Customers

When a customer can’t afford the entire purchase price of a large item, businesses offer customer financing options to give them flexible payment options. A third-party lending provider such as POM (Peace of Mind) Capital & Funding Services makes consumer financing the easiest and safest option.

You get paid for all your products quickly and in full, and you are not exposed to non-payment risks associated with companies offering their financing programs directly to customers. Businesses can then focus on providing excellent customer service while selling their products.

Third-party financiers accept partial payments in lieu of full payments and offer interest-free payment terms. Installment payments are due every two weeks or every month.

You can pay a flat monthly fee or a fee for each transaction you have financed through third parties. In addition, you avoid having to complete credit checks or collect payments by using a third-party financing company since they handle much of the work on your behalf.

Why Is Consumer Financing Beneficial?

  • Your services will be more valuable. Providing customers with easy access to payment can help you sell higher-value jobs and packages. As a result, it boosts your bottom line and increases your average ticket price.
  • Get payment upfront. If you get paid immediately by consumer financing, you won’t have to worry about getting paid by customers. Your business will run smoothly and grow more quickly by improving cash flow.
  • Be more competitive. If you provide consumer financing, you can compete with big-box stores. Merchants can further enhance their competitiveness by adding additional customer incentives. Offers like interest rate buy-downs, no-interest loans, or payment deferrals can be useful for sweetening the deal for customers. You can use this incentive to close sales and increase repeat business.

Prospective customers should always be informed of financing options at the beginning of the sales process as most customers don’t know how to ask about financing when buying a big item. If they do not wish to pay in full upfront, give them concrete information about the costs if they choose to finance their purchase.

Ensure that consumer loans are the right fit for your business by talking to your customers, evaluating your costs, and finding an appropriate lender. 

We Can Help

At POM Capital & Funding Services, we don’t just offer financial services. Our customers count on us to go the extra mile. Partner with us and establish a consumer financing program that will empower both you and your customers.

If you would like to discuss your consumer financing options with an experienced broker, call POM Capital & Funding Services at (631) 354-9290 or write to us at [email protected] to schedule a free consultation with our team.

POM Capital & Funding Services is a leading provider of alternative funding solutions for businesses of all types and sizes, offering commercial finance solutions and products to businesses in the Centerport, New York area and throughout the state of New York.