As goods become more expensive, more customers are leaving the store without purchasing things. This is death to a business owner. One way to solve this problem is through consumer financing. Consumer financing, or customer financing, is a financing option where the merchants can capitalize on interest and the buyer can get their item on credit. Let’s learn more about how you can leverage consumer financing in your business.
What is consumer financing?
Consumer financing is an all-encompassing term where the lender and customer make a plan to break up a purchase into smaller payments. Consumer financing can include by now, pay later (BNPL) plans, consumer loans, and store credit cards.
BNPL programs are payment plans that have little to no interest and allow the customer to purchase the item immediately and then make payments on it until it is paid off. These are quite desirable because they do not report to any credit bureau and they are simple for customers.
Personal loans are another option for consumer financing, and these are usually advertised as preapproval programs. They are most often used for much larger purchases, such as cars and other outdoor equipment. They carry interest, so they aren’t as good as BNPL programs, but they’re still simple and commonly used.
Finally, store credit cards are a common way to offer consumer financing to your customers. Store credit cards are exactly as they sound. They are credit cards offered by the merchant that provide benefits for purchasing from that specific business. They can have cashback options, low or no interest rates for certain periods, and rewards programs.
If you are interested in offering a consumer finance program through your business, you must decide which one you prefer to offer. The most efficient way to institute these programs is to partner with a lender that has experience in them. Aspen Commercial Lending has extensive experience working with businesses and consumer financing programs. If you are interested in working with us, you can contact us today.