Does Your Business Need To Provide A Vendor Leasing Program For Your Customers?
Vendor financing programs are one of the most popular ways to increase dealer or reseller sales volumes and profits.
The problem with most of them, however, is that they could do a much better job and add a lot more value.
Let me explain.
The objective of a vendor program is to put your customer in direct contact with a leasing company that is prepared to finance the type of asset they are trying to acquire with the customer’s financing profile.
In most cases, this does not happen for a number of reasons. Here are just a few:
- Inadequate Leasing Sources. Most vendor programs are marketed and administered by brokers or larger equipment leasing companies. Brokers can only access leasing companies they can provide enough volume to. So while they can provide a financing solution, it may not even be close to the best solution available to the customer.The same issue goes for larger leasing companies that work directly with the customer…they only have one option. Which leads to three of the following outcomes, two of which are bad: 1) they can fund the deal; 2) they can fund the deal, but not at the best available rates and terms; 3) they can’t fund the deal.
Note: The only way to have the best sources for your customer is to work with a leasing broker who has access to not only the best programs, but also “B” and “C” credit lenders so regardless of what the customers financial and credit profile looks like, there is a good chance they will get financing and you’ll close the sale.
- Inadequate Customer Service. Even if your vendor program has pretty good sources to work with, the next place vendor financing falls down is speed and accuracy of completing the application process AND getting an approval.Unfortunately, most vendor programs are either administered by someone who has too many accounts to look after, or doesn’t have the experience and knowledge to guide the application to a successful outcome most of the time. There is art and science to equipment leasing and speed without experience and skill can still lead to a bad result.
Note: The only way to get the best service possible is to be working with a leasing broker with the knowledge, experience, AND capacity to deal with your customers in a timely fashion.
Don’t Put Your Business At Risk With A Less Than Optimal Vendor Financing Program
If you have a vendor financing program in place or are considering getting one, then we strongly recommend that you give us a call so we can properly assess your business requirements and provide vendor program recommendations for your consideration.
Especially for existing vendor programs, you owe it to yourself and your customer to have someone else review what’s being offered. If there is an opportunity to improve upon the vendor program in place, the changes made will likely lead to additional sales, increased customer satisfaction, and greater potential for more repeat business.
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