When dealing with a one-stop financing program, like the one offered by Foundation Finance Company, dealers often want to know how to minimize their discounts. For a finance company who offers full service A, B, C and D lending, there is a fine line between discounting enough to cover real losses and staying competitive with what dealers can accept. But without discount financing options, dealers would miss out on a huge marketplace of people who have some credit blemishes, but are still creditworthy … these are people who might be turned down by “approve or deny-only” lenders.
Here are a few tips to help you minimize discounts, maximize profits and reach the widest customer base possible:
1) Fill out credit applications completely
It might seem simple, but it is not often done. Every question on the application serves a purpose. Take “time at residence,” for example. On an “iffy” deal, a lender knowing that a customer has lived somewhere for 1 month vs. 20 years might make a huge difference in the bid you are offered. Longer residence and job times are signs of stability, which can add to your bid. So, make sure your salespeople know to complete ALL the information requested on an application.
2) Get joint applications whenever possible
This is especially true for married couples. Often times, a deal is not approvable (or it is approved at a steep discount) because only one spouse’s information is listed, which leads to debt ratio issues. But the deal could be a slam dunk if the spouse were added. Making a sales presentation to both parties gives you a stronger sale, and it leads to a stronger credit application. Even if one spouse has weaker credit, do NOT remove him or her from the application. Foundation Finance Company will consider the “full picture” and make the best bid possible. And with the changes to revolving credit regulation over the past few years, finance companies are no longer allowed to consider income from non-signing spouses, so it is to your benefit to get joint applications to ensure the best possible approvals.
3) Disclose all income accurately
It is imperative that you and your salespeople ACCURATELY list income on credit applications. Many finance companies verify loans with customers before purchasing, and if they discover and discrepancies between the income they were told to make a loan decision and the income a customer verifies, it might mean your loan is discounted further or not purchased at all.
4) Let the finance company know about any “weird” situations
If the customer told you something during your visit that would help the underwriter understand your customer’s situation (like the reason for delinquency, or the fact that they get other income from an unusual source, etc.), tell us! One of the nice things about working with Foundation Finance Company is that we don’t just look at a FICO score. We take a full look at the customer’s credit and application factors to make the best possible bid on each deal.
Financing works best when both the dealer and the lender are working together as partners to help each other build a strong portfolio of customers and loans. By helping FFC make good loan decisions, you are ensuring your access to a strong, stable financing source for many years to come.
Foundation Finance Company offers water treatment financing, home improvement financing, vacuum financing, HVAC financing, furniture financing and more. Our programs are designed to help dealers attract new customers and close sales. We want to be the foundation on which our dealers can build sales success. If you have any questions on how our financing programs can help you achieve your sales goals, give us a call at 1-855-241-0024. We’re ready to help you succeed!
