Why should you offer equipment financing for your customer?

According to the Equipment Leasing and Finance Association (ELFA), 79%of U.S. companies use some form of financing when acquiring equipment, including loans, leases, and lines of credit. This is a significant number, and it's important for equipment vendors to be aware of it.

79% of U.S. companies use financing to acquire equipment

Many equipment vendors are surprised to learn that so many of their potential customers are interested in financing. They may under estimate the number of their customers who could benefit from an alternative payment method.

There are many reasons why a company might choose to finance its equipment purchases. In the following pages, we'll go over a few of those reasons and learn why, as an equipment vendor, you should offer equipment financing for your customers.

Affordability of Equipment

In today's economic environment, many small businesses either don't want to outlay cash or may not have cash readily available to purchase the equipment. Quite often, an equipment acquisition occurs when equipment breaks down. Without equipment financing, that business owner may not be able to acquire the replacement equipment and may put their business in peril. By offering a payment solution, you simply give a business more opportunities to say "YES" to acquire that equipment through you.

Also, many businesses may purchase add-ons or additional equipment if they know they have an alternative payment solution to cash. By offering monthly payment options, you make more sales.

Maintain Profit Margin

Many equipment vendors operate with already thin profit margins. When negotiating a cash deal, vendors often drop their prices to try and win the deal. When this happens, profit margins become even tighter. By proactively offering a monthly payment solution, more customers will purchase the equipment at full price or a slight cost reduction. This will help you not only sell more equipment but keep your profit margins inline.

Improve the Sales Cycle

When customers have the option to pay for a product or service overtime, they are more likely to make a purchase since monthly payments are more affordable than a large upfront cost, and they can be spread out over a longer period of time.

In addition, offering monthly payment options can help you close more deals earlier in the sales process. This is because customers who are interested in a product or service are more likely to buy it if they don't have to wait until they have the full amount of money saved up.If you're looking for a way to increase your sales, offering monthly payment options is a great option. It's a win-win for both you and your customers.

Studies have shown that offering monthly payment options can increase sales by up to 30%.

Competition

With 79% of businesses in the United States using financing to acquire equipment, if you are not offering a monthly payment solution, then that customer may look to one of your competitors who does. Help eliminate or reduce your competitor's impact on your business.

Offering equipment financing is a WIN - WIN for you and your customer.

By offering an equipment financing solution to your customers, you will close more deals, maintain profit margins, increase average tickets, and quicken the sales process. Don't assume that your customers can or want to pay cash. If a customer doesn't want to use your finance solution, they will tell, but a proud business owner may not tell you that he can't afford your equipment. Help your customers acquire the equipment they need to grow their business. If you want to start offering an equipment finance solution, look for a company that wants to be your partner and will get to know your business so they can provide ideas and strategies to help you sell and make more.