We are running into issues where we are losing sales due to lack of a customer financing option. I have a feeling this is going to be a bigger issue due to the virus for a while.

Does anyone currently use any of the financing companies, and if so, do you like them?

We looking into a few and they all seem to charge us which we don't want.

Thats interesting to hear. One would think if you cant afford it you shouldnt get it. Welcome to over extended America lol.

I know, i know, in the end, the customers finances are not our biz, we are to provide what they want. That said, Id pursue better customers lol.

Someone must pay for the financing. The finance company is essentially loaning your customer money and a certain number of those loans will go bad.

The customer might be able to finance the sale with a credit card. Perhaps you could find a company willing to finance for rates lower than the credit card company. This would give you some edge with the customer.

There are a bunch of contractors in my area who are promoting "free financing for two years". I'm sure that they pay something for the financing and that the finance company's wager is that the customer will be a slow pay and the finance charges balloon after the grace period. The contractor is justifying the cost as it generates more business -- at a higher cost, of course, but higher cost is better than no business. The construction companies have an easier time passing the finance charge through to the customer because it's hard to purchase plumbing installation over the internet.

Some of the big box stores offer free financing that is associated with a credit card. I suspect that the store is selling the contract to the credit card company at an attractive rate and that the credit card company's bet is that the customer is a slow pay -- making most of its money on the tail end of the contract after finance charges explode.

There may be a similar deal available to small companies like ours through the large buying groups. I've never looked into this.

Establish true remote control over customers systems for cutoff purposes and be your own financier ;)

Some guys use GreenSky Financial

https://greenskyonline.com

There's also Enhancify

https://enhancify.com

We have used Western Equipment Finance. They pay us up front and pay a commission for the referral, so it's a win for us. Not sure if they would do residential.

In the late-70s and into the '80s, the store where I worked offered financing and many people used it for their purchases at a time when interest rates were very high (remember the economy when Carter was POTUS?). The bank we used offered credit cards that allowed a second line of credit for double that of the card's normal line, at 18% interest, called 'Revolving Installment Plan'. I thought the acronym 'RIP' was pretty accurate. One of the guys who worked there used his credit card to buy a new car since auto loans were higher than 18%, so he saved over 6%/year.

I haven’t tried it yet but i believe square is offering financing now as well

Customer financing sounds as scary as COVID-19. Some people won't touch it, and others feel invincible. I don't know of a job we ever lost because of a lack of financing. Most of our customers have the ability to pay or use their CC.

Some low margin retailers make more money on financing than selling product. Do you really want to be a bank? Accepting CCs is about as far as we go, and they costs us 2.5-3% depending on the card.

I would recommend you don't waste too much time chasing these lost accounts.

Good luck!

Everyone charges. Financing companies charge more than CC companies do. CC companies charge ballpark 1.5%-3.25%, depending on card, swiped vs. not, etc.

In my former retail-based life, financing was a big thing to get and grow deals. With the clientele we deal with now, I think I've had 2 people ask about it over the last 15 years and 1000s of transactions. How many clients have asked you about this option?

NOTE: Financing is normally very expensive for you. It's one of the reasons the big box stores normally won't touch the price if financing is involved.

This is the only thing that can possibly help you. Customers that need financing have no power, so they are typically willing to finance what ever you tell them the system costs. There are no discounts and things being sold should be very hard to find deals on line. Well protected brands only. If I was looking into something like this I would probably have a minimum dollar amount I would want to allow financing on, or I would be working with a company to offer payment plans if I was selling into a condo project where there could be 40 or 50 projects or more, but those usually just end up being added to their mortgage.

I don't recall having anyone ask about financing.
Even as the whole Smart Home technology becomes affordable for a lot more people, they generally are still home owners that either have credit cards that can manage decent sized purchases or they have a home owners line of credit they can use.

Just curious, what are your average jobs/cost wise? Do you generally work for the wealthy or do you work for the middle income working class?

I’ve been very fortunate and have moved out of the middle income class (for the most part) so it is seriously rare when someone asks about financing. In my days of starting out it was obviously different, so I feel fortunate I’m not in that circle anymore.......

All of this being said I did have a client just this last week ask if I offered financing and at rates less then 7.86%. I said no, I don’t offer it, sorry. He said bummer, I would like to leverage my cash flow as much as possible right now in the markets right now and if I can get anything less then 7.86% then I’ll make money on the loan.....I told him I understand but it’s just not something my clients need. He still moved forward with the project.

I’m just wondering if this is why you are getting asked about financing....

Last time I looked into it was about 3-5 years ago.
I had 3 options:

1. Use local bank where bank did all the forms, approvals, etc. Loan was issued to the customer and customer had to write me a check. There was obviously no fee to me as I had nothing to do with financing.

2. Use financing company just like all the furniture, mattress stores do. There were NO fees or charges to me. I would provide the amount of the project over the phone, customer provided all the personal information. Approval was done on the spot and I would get paid. Those were usually the same as cash 2-4 year (24-48 months) deals with some being minimum monthly payments and others a payoff before maturity date. All monthly payments, fees, etc would be done directly between end user and financing company.

3. Use CC and give up 2.5%-4%. If a project is $20,000, I'm not giving up $600 in credit card fees.

Now before you ask how can financing company do that -- it's simple. They count of the large percentage of people not being financially responsible. The few that miss a payment or don't pay it off before maturity date are hit with the 29.9% or 39.9% interest for THE FULL amount with interest backdated to start of the installment loan.

Leasing.

Talk to a commercial leasing entity…..