If you’re a vendor, this might well be a familiar scenario for you.
You have a customer interested in purchasing your product, which is great news for you. You’re all ready to get them dotting their i’s and crossing their t’s on the final contract, but you know they can’t afford to make the purchase without vendor financing. What happens if they can’t get it?
You’re out a sale, is what.
This is where a powerful argument for a relationship between a vendor and a financing firm can and should be made. By forging an agreement, formal or informal, to refer customers to financing companies you like and trust, you can ensure that customers short on cash but long on desire to buy what you’re offering will be able to connect the dots. It won’t work out 100 percent of the time—nothing does, after all—but it gives you a leg up on the competition and removes both excess time and headaches from a process that’s otherwise chock full of ’em.
Of course, you don’t want to run headfirst into a relationship with a finance company without doing your due diligence. Let us give you a few points to consider before you shake hands.
Tips For Partnerships
- Look for flexibility. Your customers may come from a variety of backgrounds, credit scores and cash flow. Locking in with one partner who refuses to adjust terms is not going to help you overmuch.
- Consider speed. If your partner has a rigorous approval process that involves a mountain of paperwork, customers will balk. Don’t go for speed at the expense of credibility and honesty, but consider it a factor.
- Go for trust. If this financing company has speed and flexibility but strikes you as skeevy, steer clear of them at all costs. If you’re lucky, you’ll be working with them frequently, and you want a company you’re comfortable with.
- Choose someone who works well with customers. All your hard work enticing customers will be for naught if your financing partner treats them rudely and ruins it for you. Be sure to scout their reputation ahead of time.
Direct Capital has had our share of partnerships with vendors over the years, and we try to fit all three criteria. How often do you need financing for customers?
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