10 Benefits of Financing for Businesses and Their Customers

It’s one of the golden rules of business that everyone should understand: if it benefits the customer, it benefits the company, especially long term. Financing is one of those rare mechanisms that fulfill this rule in many ways, going above and beyond for everyone.

Maybe you’re struggling to understand financing or need a refresher to put things into context for your business. Here are ten benefits of financing for your business, your customers, and your industry at large.

1. Increased Sales

Sales keep the business world moving forward, whether you’re selling luxury cars in the city or running obstacle course boot camps in the countryside. When you allow your customers to finance larger purchases and pay over time, you’re fueling more sales in the short term.

Many studies have shown that a skeptical customer quickly becomes more convinced to make a purchase when the option to finance is on the table.

2. Membership Benefits

Many companies, such as top credit jewelers, wrap up their offers in a membership format so that customers get extra perks as they chip away at a purchase over time. If you have your sights set on a particularly pricey piece of jewelry that you can’t afford all at once, using credit jewelers can greatly help ease the financial burden. Credit jewelers can also come in handy if you’re looking to buy an expensive piece of jewelry for a loved one, like an engagement ring or diamond earrings. 

The “buy now, pay later” attitude gives customers more incentive to keep shopping while utilizing their perks. Whether or not you’re in business as a credit jeweler, membership programs are always advantageous as they typically keep customers coming back. 

3.  Business Development

Most of the great business leaders in history know that financing is key to getting an idea up and running. If you’re chasing a dream and need that extra cash infusion, there are plenty of ways to secure loans and boost business development.

From buying retail space to equipment, inventory, and more, the right amount of financing can be a game-changer in any industry.

4. Customer Retention

Customers are happy when they feel in control, and that’s what financing allows people to do; they can choose how they pay for items they want.

Therefore, that happy customer is way more likely to return to shop with you or refer your brand to friends and family. 

5. Larger Order Volume

When customers know they can finance a purchase, they are more likely to add more products to the cart and boost the order volume without hesitation. That’s because the average payment cost only increases by a few dollars a month. 

This is especially noticeable when you add extra discounts and promos to products that are already competitively priced. Customers feel that they’re getting a great deal, and your business profits from larger orders. 

6. More Upsell Opportunity

Speaking of upsells, financing is a dream for any salesperson who knows the sharpest sales tactics. There’s always a way to work around common objections when speaking with prospects, and customers are more easily convinced to buy more when they can finance.

7. Consistent Cash Flow

From a business perspective, cash flow is king, and the sooner you get it, the better. With the option to let customers finance goods and services, you keep the cash flowing as the bank picks up the slack for customers who can’t pay in full. 

In the meantime, the customer must pay some extra interest, but that doesn’t directly impact your business. As long as everyone understands the terms of the agreement, you can walk out of a negotiation with more cash than usual.

8. Customer Buying Power

Make customers feel like they have the power, and there’ll be no need for complex sales tactics; this is a key component to business success that many tend to overlook.

In this context, customer power includes the ability to purchase more for less money and have more options with how to pay. The last thing you want is for customers to feel trapped or like they’re being pushed into a deal that doesn’t suit them.

9. Brand Loyalty

We’ve all heard the saying that it’s far more expensive to attract new customers than it is to keep current ones. Brand loyalty is more important than ever in a world with so much choice.

Letting customers finance is a subtle form of marketing that can have a positive long-term impact. Every time the customer completes a monthly payment, they are reminded of your business and the purchase they made; it won’t be long before they’re back to buy again.

10. Broad Industry Applications

Financing used to be reserved for houses and cars, but now, everyone is taking advantage of this tool. Whether you’re selling clothing or want to get into the credit jewelers business, you can let customers buy now and pay later. 

With a bit of research, you can surely figure out a way to make this strategy work for your business. 

Make Financing a Win-Win

There’s no reason to hide from financing if you believe in your product and know how to manage the process. Implement the strategy now, and you can soon begin enjoying all the benefits outlined here.