From the desk of:
Business Financing Specialist
If you are an equipment vendor, dealer, or reseller, then there is a good chance that a vendor financing program is going to very important for your business.
The right customer financing options will contribute directly to both faster sales closings and more sales overall compared to just a cash sale offering.
At the same time, if you have an equipment leasing option that does not provide a high percentage of customer credit approvals, then it can do more harm than good so its important to assess what makes the most sense for your business.
Lets start the assessment process by going over the different types of vendor financing programs out there.
In category one, the equipment financing options are provided by one funding source. This can be a bank, leasing company, credit union, etc. This category of vendor programs works the best when you have a very homogenous customer base with respect to a financial and credit profile, and you have a narrow product offering with a sale price under $20,000. If your customers and products do not fit this description, then you’re going to need to focus on category number two, broker driven programs.
Under the broker category, your vendor equipment financing options can extend to a wide variety of customer credit profiles, equipment types, and deal sizes. This is because a broker has the ability to work with multiple funding sources, allowing for each customer application for financing to be uniquely placed with the most relevant lender.
First, getting the customer approved for financing with the most relevant financing source as quickly as possible is not only going to close more sales faster but it also going to increase customer satisfaction as the customer will appreciate being able to come to one place for both their equipment and financing.
Part of the way that broker financing can increase the close rate is in getting the process completed quickly as the more time the customer has to shop for options, the more likely they could be lost to competitive offerings. In highly competitive markets, the turn around time on equipment leasing application is critical to the profitability of any particular vendor or dealer.
A second benefit is that a dedicated broker will provide greater consistency to the overall process which will be reflected in the ability for the customer or buyer to get financing in place in a timely basis. With a one funder vendor program, customer typically will be calling into a service desk where each time they call or have a communication by phone or email, they end up speaking to a different person. Not only can this become highly frustrating dealing with multiple people that may not be seamlessly working together, but it can also cause delays that either jeopardize the sale or erode customer confidence of both.
The third benefit is that less straight forward deals require greater experience to arrange financing and that is more likely to be accomplished through and equipment financing and leasing broker who works with lenders that collectively cover the whole market versus a customer service rep that only works within the narrow confines of the single program they are administering for the funder they work for.
Both Category one and two can work well…you just need to make sure you properly assess which one is the best fit for your particular business, sales process, and customer profile.
The focus of our vendor financing programs are broker based through the placement of equipment leasing solutions across all industries and credit profiles.
We take considerable pride in customizing programs that fit the needs of the vendors and dealers we work, continually striving to improve upon our level of service and innovate the customer financing process required by your sales process.
If you are a vendor who is considering getting a vendor program in place, or you are a vendor/dealer that would like to see if your current customer financing option can be improved upon, then I recommend that you give us a call to get a free assessment of your customer financing requirements and a review of the effectiveness of any current customer equipment financing programs you’re working with.
The process is fast and very straight forward and their is no cost or obligation associated with it.
After we complete our assessment, we’ll outline a vendor financing program that meets your needs and if you have a deal requiring financing, we can immediate work with you and your customer to get financing approved, help close the sale, and get you paid.
Give us a call today and start closing a higher percentage of your sales opportunities.
BFE Financial Services
2186 Mountain Grove Avenue
Burlington, Ontario, Canada
905 690 9874 P
905 981 4325 F
For more information about equipment financing and leasing in Canada, go to https://www.cfla-acfl.ca