Determining how the customer will pay for the project is often the most difficult part of the sales process. Many customers don’t have cash to pay up front or want to take advantage of low monthly payments. Consumer financing comes in handy in these situations. It allows the customer to spread the cost of the project out in monthly payments and avoid high credit card interest.
What do you do when big banks decline your customer’s application? Don’t give up! Second look financing is an option for many customers who have prime/subprime credit. Second Look Financing, also known as “Discount” financing, is a way to approve a wider variety of credit, including customers that most “prime lenders” (like banks) would decline, by sharing a portion of the risk with the dealer. Risk discounts are costs to the dealer based on the customer’s credit and application information; the weaker the credit, the higher the fee may be.
You may be asking yourself, “Why should I accept a discounted deal?” There are many reasons that second look financing is in your best interest:
- Close sales that other lenders decline; Some profit is better than no profit.
- Help cover general, administrative and marketing expenses.
- Prevent customers from using a competitor who does take discounts.
- Future sales & service from customers along with referrals.
- Breaks from suppliers on pricing due to greater volume of sales.
Hearing “no” from a big bank isn’t the end of the line for your project. Partner with FFC to ensure your customers always have an option for financing – especially if their credit isn’t great.