When we talk about Vendor and dealer financing, we’re basically taking about the sale thing with respect to equipment leasing solutions for the end customer.
We could also add the term “equipment resellers” to the list as well or any other term that identifies an established business that sells equipment to their customers.
The key here is that we are talking about a business that sells or resells equipment, not an individual person that sells something privately. And in the segment of the market that we work in, we are also referring to sales transactions to other businesses. Vendor and Dealer financing programs relates to consumers is serviced by a totally different part of the market.
The equipment financing programs that we set up for a vendor, dealer, or equipment reseller provide their customers with direct access to a credit granting program that provides capital for the specific type or types of equipment being sold.
The financing or leasing program is not owned or funded by the vendor or dealer. They just direct their customer towards a financing program that typically already exists that the vendor or dealer have taken the time to get qualified for.
What we mean by qualifying is that most vendor or dealer programs are provided through equipment lease financing which means that the leasing company is going to be the purchaser of the asset and will provide the end customer exclusive use of the equipment through a lease agreement. Because the leasing company is going to be owning the asset, they want to make sure that 1) the assets being sold have an established resale market, and 2) that the vendor or dealer is a reputable business that stands behind their products and can provide after sale service if required.
So even though the ultimate credit decision to provide equipment financing is based on the customers financial and credit profile, the vendor, dealer, or reseller must also qualify with the lender in order for any potential sale they want to make be considered for funding by the finance company.
The term vendor financing is also used frequently in the real estate market but the application of the term there is totally different in that vendor financing from a property perspective tends to involve the seller agreeing to defer the receipt of the proceeds into the future and this arrangement is referred to a a vendor loan or vendor financing as the vendor is the actual lender indirectly providing funding to the deal.
Vendor and dealer financing from and equipment resale point of view strictly relates to the vendor or dealer providing their customers with access to a financing program that is capable of financing the equipment the customer wants to purchase.
This is what we specialize in and would welcome the opportunity to either set up a vendor finance program for your business or provide a free assessment or valuation of a vendor funding program you current have in place.
Give us a call today and find out how we can help your customers secure financing and help you close more sales.