Higher sales and increased margins through vendor financing
“We will get out of business without vendor financing” according to the president of the distributor of commercial strength and cardio equipment. Nearly 65 percent of the company’s revenue was produced using a vendor financing program carried out more than ten years ago. Vendor Financing Program provides manufacturers, distributors and dealers from various industries of the ability to offer customers in a convenient way to obtain their products at the point of sale. Some of the main benefits of vendor financing include:
· Increased cash flow vendors through pre-funding, or down payment, and reduce receivables through collecting balances for product delivery
· Increased margins and higher sales by focusing customers for monthly payments instead of reducing prices
· Faster selling cycles – fewer worries about whether your customers have money in a capital budget or if they can (or will try) find their own financing
· Transfer risk financing to third parties through a non-recourse program
· The ability to open new markets including selling your products outside the United States with a program that can provide financing of $ 5 thousand, vendor financing can be implemented to cover most types of assets and various customer credit profiles including starting. UPS and initial stage company. For an amount of up to $ 100 thousand (and higher), many financing can be approved in just four hours after your customer completes one application page. For greater transactions, approval can be obtained as soon as two working days after submitting financial statements and tax refunds. Rental requirements can be expanded up to 84 months for equipment with a long useful life sold to qualifying loans. According to Southeast Equipment manufacturers, flexibility, creativity and extraordinary support enjoyed through vendor financing programs provide it with competitive advantage. The vice president of sales strongly believes that choosing the right programs and leasing companies can be a difference in winning sales competition.
Some questions to be submitted in choosing the best leasing company for your business include:
· Flexibility – Can Finance fund credit A, B & C? Can the soft cost be included in the amount of financing? Will all credit be financed without walking again to the vendor?
· Minimal and maximum – How little and how much agreement can investor funds? Is there a limit on how much credit can be extended for the buyer given? Any minimum or maximum volume requirements as a whole to create a program for your company?
· Creativity – How many program structures and end user offerings can be provided by investors? Will investors create unique programs to meet certain customer specific needs?
· What level of support you need for sales, marketing, administration, and arrangement of agreement? Do your customers need a personal touch or will a very automatic system become more suitable for your sales method? If you can visualize your company as a one-stop solution provider for your customers’ needs by having the ability to offer equipment financing fast and easy, then vendor financing can give you new and profitable opportunities.