If you have a business, you want to keep customers engaged and happy with your organization. Depending on what you sell, you may want to try customer financing. It is a payment plan that lets your customer have your product and pay for it over time. Here are some facts about business-to-consumer financing and increasing customer loyalty and sales.

Ways To Offer Financing

There are several options for customer financing, and you need to research to determine which one suits your business needs. You can offer it through your own business or choose a third-party platform. If you manage the financing yourself, you’ll have to run credit checks, financing, and payment collections. If this is too much to handle, you may want to consider a third-party platform.
If you have someone else manage your business to consumer financing, you avoid potential risks. Your customers will have the option to apply for payment plans at checkout and will automatically know if they qualify. It takes a lot of the work off of you and your business.

Pros of Consumer Financing

There are several positive reasons to use consumer financing with your business. You can gain new customers that otherwise could not afford your products, and you can increase loyalty and retention. You can boost sales by reaching customers that have been on the fence about your items or those that would buy more buy your pieces but were out of their price range.

When you choose a third-party company for your financing, they will pay you upfront and collect payments from the customer. It limits your risk, and you can have your money immediately.

Cons of Consumer Financing

While business to consumer financing has many benefits, it pays to be aware of the potential cons. You may come across a customer with bad credit and end up with bad debts. It can hurt your business and cost you money. When working with a third party, you can avoid most of this. If you decide to offer the financing, you have just lost money. Also, if your organization manages consumer financing, impacts on your cash flow exist anyway. Eventually, customers will start to pay you back. However, until then, you have less money available.

These facts about consumer financing can help your business reach new customers and increase your consumer base. While it does have a few points you need to keep in mind, this type of financing can help your business grow exponentially.