Financing is one of the best selling tools for equipment dealers looking to sell more equipment. Equipment financing can help you sell faster because buyers prefer to have a smaller and more manageable payment.
Here are the 4 big reasons you need to offer financing to your customers:.
“Interested in selling more equipment? Contact us today: 888-505-5835 or email us info@kfacapital.net”
No 1. Financing takes the attention off the purchase price and makes it easier to make a buying decision.
Take your buyers focus off of the purchase price by offering an easy monthly payment to understand. Most buyers even if they have the money or a great business are price conscious. The buyer is always concern about cash flow. It's easier to withdraw $700 per month than it is to take out $30,000 from the bank account. Conceptually, it’s easier to understand a number that fits into their regular cash flow and budgets.
Let’s look at an example: Say your customer wants to buy a $30,000 mini tractor. Or, it could be any piece of equipment with a $30,000 value. Which do you think makes more sense to them?
Statement #1: “The mini tractor costs $30,000.”
Statement #2: “The mini tractor costs $700 a month over 5 years.”
$30,000 is a lot of money, when you have to pay it all up front. And, $700 sound like a little in comparison. Furthermore, Conversely, $700 is more manageable for any business owner. They know that if they pay $700 per month that their return on investment, will be immediate. If they pay $30,000, it would take longer to see a return on investment. As finance experts we always want to make sure that businesses can make money with what they buy or what they invest in. No 2. Increase potential buyers
If you offer only cash payment, you may be reducing the amount of potential buyers. There may be buyers who have cash to buy. At the same time, there may be buyers who don't have the cash. Let's go back to the $30,000 mini tractor example. By and large you will have less buyers who have $30,000 ready to spend. On the contrary, you may have more buyers who may have $5,000 or $10,000 that they could put down as a down payment. At the same time, you may have buyers who don't have the cash to buy. In some cases, 100% financing is available if the buyer has good business and personal credit. By offering a 0% down payment or 10% down payment option, you will increase the number of potential buyers.
Also, this creates greater demand for your business. Let's assume you have limited inventory. But, by advertising financing options you increase the number of buyers. Now, you have more buyers that you can sell too and you may need more inventory to sell. It's better to have more buyers, than less buyers.
No 3. Increase your sales force
Offering financing options will help you grow your sales teams. Why do car dealers have so many sales people? Car dealers understand this better than anyone. They know that without financing, it would be very difficult to reach the amount of sales. The same applies for equipment dealers. Financing is a sales tool for your sales representatives. It is a tool that helps them generate more leads and have more interested buyers. With time you can increase your sales force.
No 4. Increase cash flow
Financing allows you to increase cash flow. Once the buyer is approved and they sign the loan agreement, you get paid the same day or the next day. In addition, financing should reduce your sales cycle. Instead of having to wait 1 to 2 months, you may be able to sell every 15 days with financing. This increases cash flow. Also, with financing you should be able to sell more. Perhaps you were generating 14 equipment sales per month without financing and with financing you generate 2 additional equipment sales per month. Moreover, your sales representatives will increase their commissions. This gives them more motivation to sell more. In summary, financing helps you increase cash flow in multiple areas.
Summary
Let’s not forget to mention that financing takes only minutes, sometimes a bit more, to approve your customers. In most cases, you can obtain a credit decision for your buyers the same day. However, worst case scenario would be 72 hours. Paperwork is minimal because the loan is secured to the purchased equipment.
Take Control of Your Sales with Financing
Start selling your customers equipment and add-ons based on what they need, not on what they think they can afford. It’s much easier to handle price objections when you can break the costs into small affordable payments. Your customers will appreciate how easy it is to work with you, and they’ll come back. For more information call 888-505-5835 or write to info@kgfacapital.net
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