Consumer Credit for Small Business Owners
If you’re a small business owner that focuses on selling big items, you’ve probably experienced plenty of cash crunches before. Whether it’s kitchen appliances, cars, big-ticket tools or other expensive goods, customers are reluctant to fork over these huge sums of cash up front, leaving your business with plenty of inventory but no sales to bring in the revenue. Thankfully, you have the opportunity to remedy this issue through offering consumer credit. This is an arrangement in which you allow the customer to set up a payment plan in order to secure an expensive appliance or other good.
You Won’t Have to Wait for Cash
Setting up a payment plan through consumer credit doesn’t mean that you’ll have to wait longer for your cash. You’ll be working alongside a third-party financing company. When one of your customers chooses to make a purchase using the credit option, this company will pay you the sum (minus a small fee) of the purchase up-front. Then, they will collect payments from customers later on.
Increase Your Chance at Sales
This arrangement has some serious benefit for small businesses of all types. First and foremost, it increases the likelihood of making a sale. While you might be giving over a small percentage of your revenue to the financing company you’re working with, therefore making slightly less money per sale, you’re much more likely to make more sales throughout the year, increasing your profit overall.
Furthermore, using a financing company for your consumer credit helps you to keep tabs on your incoming payments easier. Rather than accepting a dozen different payments on a plan from a customer directly, you’ll receive one larger lump payment from the third party. Keeping up with this information on the books is far simpler, and information is much less likely to be overlooked or misplaced.
When you’re working with a financing company, it’s important to note that the professionals there will be far more interested in your customers’ credit than your own business credit. This is because your customers are the ones who the company will be collecting payments from. Therefore, they need to ensure they can depend on the customers to keep up with the monthly payments and fees. This is why a quick credit check is usually run before a customer is approved for a credit plan with businesses that offer this sort of deal.
Offering consumer credit at your place of business can seriously boost your sales, and help you build a truly successful experience. More sales means more money, and when you’re a small business owner, more money is always better.