Most small businesses are using commercial equipment financing to help them acquire the equipment they need to grow and thrive. For commercial equipment vendors, it’s become increasingly important to provide financing options for their clients. However, not every equipment seller is ready to offer financing solutions, and sellers that do offer their own financing have to deal with the risk and hassle of evaluating applications and determining creditworthiness. By partnering with a commercial equipment financing company, you can get the financing options your customers demand without the associated challenges.
A solid finance partner doesn't just offer financing to customers. It also becomes an extension of your sales process and helps you close more deals. You get all the benefits without needing to handle the payment details. You'll lose fewer leads, and you'll have the opportunity to widen your pool of prospects. In other words, you'll make more revenue every quarter.
Interested in providing additional purchasing options for your customers? Keep reading to learn more about the benefits of partnering with an independent equipment financing company.
Let Prospects Know You Offer Financing and Leasing Options
Your prospects are likely familiar with financing because they've taken out personal loans to pay for things like houses and cars. But while they understand the concept, they might not know that financing is available for their business's large equipment purchases. This is where early education in the sales process becomes important.
For example, your sales team could talk about financing options when discussing price. That way, prospective buyers realize they don't have to dip into their cash reserves or run up their credit to pay for your equipment. And those who want financing will be relieved to know that they won't have to find it on their own.
Prepare to Explain the Basics of Financing
You don't have to go into detail, just be ready to give your customers a basic overview of what they'll experience when they work with you and your finance partner. But what happens when a prospect wants to know more? Our funding specialists are on call to talk them through the process. We value transparent, professional, and fast communication as much as you do. Our goal is to show you customers we handle things promptly and courteously.
Five Reasons Equipment Vendors Offer Financing to Their Customers
1) Customer Retention
Customer relationships are the lifeblood of any B2B environment. Strong relationships help build large client bases through referrals and keep customers loyal to your business. Offering financing to your customers engenders those relationships when it's backed by great customer service and flexible payments.
Customers appreciate when you're accommodating to their financial needs, which is exactly what financing allows you to do. By giving your customers the flexibility to manage their funds and assets, you're telling your customers that you're willing to work with them so they can still obtain the equipment they need.
Offering financing can help make customer relationships stronger and:
Address customers’ financial issues.
Answer their questions about the equipment.
Help them with future lease/financing decisions at the end of the lease/financing term
2) Increase Your Sales
When you offer financing, you won't just see initial sales growth from customers who can now afford more equipment. You'll also see shortened sales cycles from repeat customers. The increased affordability of your equipment makes it easier for your customers to generate more revenue at a faster pace.
Instead of saving the funds to purchase revenue-generating equipment outright, your customers can finance the equipment and generate revenue faster. The revenue generated from the new equipment can then be used for future equipment purchases, shortening your sales cycle significantly with repeat customers.
Providing a financing option can:
Facilitate equipment sales
Generate additional revenue and benefits.
The primary benefit of offering more purchasing options is that it allows you to finalize more sales. Customers who would have looked elsewhere for cheaper equipment or tried to wait until they had more spending capital may decide to purchase from you now if you can offer a financing option that fits their needs. If you want to maximize your ability to close deals, you’ll need to offer multiple financing options. Different clients have different needs, from flexible payment schedules to quick approval and funding.
3) Makes Your Equipment More Affordable
Paying for the total cost of equipment in cash is not accessible to most small to mid-sized businesses. Normally, that's not a fault of the pricing, but rather the reality of the industries producing needed equipment. Many businesses would purchase more equipment if they could afford it, while others are priced out of purchasing the equipment their businesses needs entirely because they don't have the capital for it.
That's where equipment financing comes in. By breaking up the initial purchase price into manageable monthly payments, your equipment becomes significantly more affordable to your customers. When your equipment is more affordable, you make more sales.
Offering financing can help customers:
Save money: Because of the manufacturer’s knowledge of the equipment and ability to resell pre-owned equipment, the manufacturer may be able to take additional risks on the residual value, which lowers the customer’s monthly payment.
Get better terms: The customer will purchase equipment that might be otherwise delayed because of financing, and the manufacturer might be able to provide better financing terms.
Stay current: When a customer takes advantage of leasing/financing, it eliminates the risk of the customer owning equipment that is technologically obsolete.
4) It's a Rising Trend
Over time, you'll encounter more customers who need financing. The more your team learns about our approach to equipment financing and leasing, the easier it'll be to talk about it with qualified leads.
Of all manufacturers who offer a financing option to their customers, 67% expect equipment financing will increase as a percentage of their manufacturer sales.
Among manufacturers who offer financing for their equipment, a recent study shows approximately 30% of all equipment sales are financed by the manufacturer or its finance partner.
5) Improve Your Reputation and Customer Relations
Helping clients acquire the equipment they need on their terms creates better customer relations and helps build your business’s reputation as a company that puts clients first. Offering more purchasing options and improving client relationships can also help you develop more repeat customers and improve brand loyalty.
The Bottom Line
The bottom line is that financing makes your equipment more affordable, which creates an opportunity to sell more. Not only is the affordability appealing to your customers, but promotions and strong relationships will keep them coming back for more equipment when they are ready to grow or replace what they have. With financing, your customers’ businesses can grow faster because they are not going to expend their capital on a piece of equipment and can invest their capital in multiple pieces of equipment to increase their revenue and efficiency faster. When you offer financing, you are not only getting more sales and increasing your customer base, but you are also bringing in a third-party that understands and supports your business’s needs and goals. Want to increase your sales by offering flexible payment options to your customers? Contact us today to get started.
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