If you’re an equipment vendor that is looking for a financing program to offer your customers, there are some questions you have to ask yourself before you jump into a new relationship.
There are obvious benefits to teaming up with a vendor financing provider like possible increased sales volume, an accelerated sales cycle, improved client retention and the ability to add new customers more easily.
However, making the jump into an equipment financing program is a major decision that vendors shouldn’t take lightly. Here are some questions to ask:
How An Equipment Financing Program Affect Your Bottom Line?
As an equipment vendor, your main goal in teaming up with a vendor financing provider is to boost your bottom line.
You should choose a program that targets your customer’s needs that leads to more sales.
Taking on your customers’ accounts receivables requires time and energy, which could easily affect your own cash flow.
When you decide on who your finance provider is going to be, make sure to ask when you’ll actually receive the payment on behalf of what your customer purchased.
This will allow you to buy your customer’s time without hurting your own business’ cash flow.
How Does This Program Help My Customers?
Having your customers identify the true value of an equipment financing program over paying with just cash is vital. If they understand, they could start using financing to purchase more equipment.
Customers are not going to come back and tell you they bought from someone else because that vendor got them financing. Finding the right vendor financing program with the right terms that suits their needs is something you should do up front.
For customers with good credit, the approval process should take an hour or two. If the customer has had some past issues, approvals can take longer and require more information.
A good finance partner will be willing to look at more information and dig into the story to help get more deals approved.
Will This Interrupt My Day-To-Day Operations?
Offering financing as part of your sales process should make your operations go faster.
Your goal is to improve things, not to go back in time. Integrating your new vendor financing program with your technology can also be a challenge, but it could lead to more sales down the line.
Make sure it’s an easy integration that makes it simple for you and your finance provider.
Whatever you do, make sure you have thought things out before heading into a new relationship.