FEATURE STORY By William G. Sutton
O 20
Five reasons to offer FINANCING TO YOUR CUSTOMERS
ne of the lingering negative effects of the recession on companies has been the decreased availability of access to capital. A January 2012 study of small and
mid-sized business owners reported that 49 percent of survey respondents said lack of bank loans restricted growth opportunities. For small and medium-sized equipment
manufacturers and vendors, the credit crunch has squeezed them from both ends. Their access to capital to acquire equipment has been reduced, and at the same time, their customers have less access to capital to buy their products. As a result, many equipment
manufacturers and vendors have learned the benefits of equipment financing as a way to acquire equipment for themselves. However, many don't realize that there are options available that can help them expand their markets to businesses that
do not have cash readily available or have traditionally used bank lines of credit. By establishing a captive finance capability, you can open up a valuable opportunity to grow your business through one of the following financing models: • Developing financing capabilities
in-house • Creating a formal partnership with one or more finance sources • Creating an informal partnership
with multiple finance sources for one-off transactions. Following are five key reasons to consider offering financing to your customers:
1. It's a growing trend A study by the Equipment Leasing and Finance Foundation (ELFA) shows that among manufacturers which offer financing for their equipment, approximately 30 percent of all equipment
sales are financed by the manufacturer or its finance partner. That rate is increasing each year as the financing division plays a more important role in the organization's overall strategy. According to the same study, of all manufacturers which offer a financing option to their customers, 67 percent expect equipment financing will increase as a percentage of their manufacturer sales. The growth of this trend is largely due to the benefits derived from offering financing and its business impact.
2. It builds customer relationships Building customer relationships
and improving customer retention are key benefits of establishing a finance capability. It allows you to build rapport and trust in addressing customers' financial issues, as well as answering their questions about the equipment. It also extends the relationship into future transactions
OUTDOOR POWER EQUIPMENT www.outdoorpowerequipment.com
Image ©istockphoto.com/RBFried .
