With the so much of competition in every industry, it is very beneficial for you to supply the consumer with as many financing options as feasible. Consumer financing, specifically, gives your SMB (small to medium sized business) the ability to grow your base, extend your brand and increase your profits.

It is instructive, then, to understand the different types that are available, so that you can make informed decisions on the ones most applicable to your business.

Types of Consumer Financing

Although there are consumer financing options available for the smaller businesses; the more robust ones (that accept low credit rating applicants, etc) are usually reserved for the corporations that can afford to suffer losses. Basically, they consist of deferred or interest-free payments, which inevitably encourages consumers to spend more. The ability to pay in installments is often very attractive – especially during holiday seasons.

If the products/services are paid for within the specific amount of time, then there’s no interest. If the consumer does not pay the total amount by that time, then the interest rate they were given with the consumer financing approval form is activated, and extends back to the time of purchase. If you are a business owner, the plus side is that offering this option can be done quickly and efficiently; it doesn’t require special software or licensure.

Advantages of Consumer Financing

This option speeds up payment for both parties; if you are a small business, you might consider outsourcing your financing to a specialist; they will pay you in full, and the customer will pay the company monthly.

Another advantage is the direct improvement in sales – after all, when they don’t have to pay in full right away, the consumer will often buy more products. You will also sell more costly services to them.

Lastly – for the major advantages – you grow your customer base and build loyalty to the company. Financing has proven to render a consumer a customer for life, in many cases. You keep them in the sales funnel longer, if nothing else – which provides more opportunities for them to spread news about your products.

If you’re looking for a consumer financing provider, then drop us a line at the LMC Alternative Capital. The experts here have a collective decades’ worth of experience in business matters.