Being able to offer finance is essential for your business, as well as the businesses you are selling to, as there are various reasons why your customers will want and need to use an alternative to large payments, especially in the current situation. Take a look at the main reasons why offering a finance package for your products is so important, and how you can access this with Johnson Reed. By becoming one of our ‘Raving Fans‘, joining our list of suppliers offering finance with our support across the spectrum, such as with legal guidance, marketing and competitive rates.
Sell more, more often
By introducing an option to purchase your products with finance, you are giving businesses and your customers more buying power, with greater options and access to equipment needed to improve their business. This will ultimately generate more sales for your business as, quite simply, businesses are more likely to be able to afford the monthly payments in line with their cash flow and finances, compared to the large payment which isn’t always readily available. In addition to generating more sales from more businesses, businesses may also be able to buy more or higher price products without the restriction of price tag, to an extent. This makes your products more affordable, giving you the opportunity to sell more, more often.
Wider customer appeal
Offering finance will give you a wider customer appeal, not only by bringing more customers to your business who can spread payments of equipment, but different types of companies too. Companies such as new start businesses with low capital, medium businesses that want to expand but might be restricted and those wishing to keep money for a rainy day will all have access to your products, increasing your potential pool of businesses that you can work with and sell too, whereas suppliers that do not offer finance may not be able to encapsulate these areas of the target market. By widening your customer appeal you can enhance your relationships with companies, supporting them in their growth and increase your potential to develop your reputation as a supportive supplier.
Promote return on investment
Purchasing new equipment for the business on a finance or leasing package can always be seen as an investment into the company. Not only will it allow the bank balance to stay healthy, it allows the business to trade without restrictions of old, damaged or outdated equipment straight away. In turn, this will allow the company to provide a better product or service to their customers without having to save and build capital to buy products with lump sums, therefore improving the quality of output and driving sales. By having the latest equipment without financial difficulty, the business can grow and succeed, or in the case of new starts, it can hit the ground running and generate revenue needed to make profit.
Reduce credit risk and improved cash flow
Financing equipment allows the company to maintain positive credit, without the expensive lump sum that is necessary for large purchases. It is important for businesses to keep money for a rainy day, as cash is king more now than ever. Although buying equipment outright may seem a good option, there are various unexpected expenses that businesses may fail to take into account, meaning finance can be a sensible option to offer to clients, keeping their credit risk low and helping them improve their cash flow.
By using equipment finance or leasing, your payments are fully tax deductible, as opposed to an outright purchase, where your company can only claim capital allowances. Offering finance and leasing can give your customers the opportunity to offset payments against their tax, actually saving the business money in the long term. Promoting this you can help businesses realise their potential savings and the benefits of using the leasing your products.