By Lyndsey Brooke
Things are starting to feel a lot like 2008. It doesn’t seem like it was that long ago that we experienced the last recession, but it’s been over a decade. The housing market bubble burst, jobs were lost, and people felt uncertainty every day. Spending money became focused on the necessities, and not much else.
With the latest news of the coronavirus pandemic sweeping the globe, experts predict that we’re entering another period of economic apprehension. Sure, people are willing to drop money on things like toilet paper and hand sanitizer in times of apparent emergency. But what about major purchases?
If you are a business owner, you might feel concerned. People are becoming more wary of traveling and crowds. They are starting to feel insecure about their jobs. In some sectors, like dining and hospitality, it has already started.
These feelings of anxiety don’t just stop with the day-to-day routines. People tend to spend less money during times like these, perhaps fearing the unknown or to save up for a possible emergency. In addition to holding onto cash, consumers may be afraid to use up their credit limit because it’s hard to know how banks will react when the economy becomes shaky. Credit limits could end up reduced, or even eliminated for many. It has happened before.
This is why consumers may feel more comfortable using a financing or buy now, pay later option, especially when it comes to major purchases. This way, they can hold onto the money in their savings account, and not worry about using up the limit on their credit cards. As a business owner, cash flow is king and you obviously want to continue making sales, and in-house financing is an attractive alternative to consumers right now.
There are different options when it comes to financing. There are more traditional third-party loans, which are usually based on a consumer’s credit score as well as other factors. There are also in-house contracted monthly payment options, which may be appealing to a business because it keeps them in control of the transaction and the incoming payments. Plus, these monthly payments are sometimes guaranteed to the business, so it ensures a steady flow of income even if sales temporarily decline.
Most business owners will say that making a sale, under any circumstance, is better than not making a sale.
As a business owner, it’s time to be proactive and start planning for the possibility of a recession. Even if it doesn’t get to that point, it’s time to get serious about a selling contingency plans.
Adding a customer financing solution can lead to growth and increased revenue during good times, and survival during the hardest of times. And there is really no harm or risk to your business or your customers.
Aren’t more options always better than fewer?
When it comes to how businesses close sales, the answer is always YES!
Here are the just some of the obvious benefits to individuals of financing a purchase over $1,000. Consumers can keep their savings in their bank account, as well as not have to increase the balance on any credit cards. A buy now, pay later financing alternative means that consumers don’t have to stress about coming up with a large amount of money all at once, and instead can pay back comfortable monthly installments over time. Interest rates are generally pretty low on loans, or at least not much higher than credit card rates.
And as a business owner, studies have shown that three out of every four consumers making a major purchase always seek financing. This means that if you make it known that you offer financing, consumers will find you because they are already looking for it. It is definitely a factor that influences purchasing decisions. We already know that consumers do their research before making a major purchase, so if your website or marketing materials clearly state that you offer financing, it puts you ahead of the competition, as well as offers a solution for payment alternatives.
Flexxbuy is a U.S. leader in customer financing solutions for businesses. With unique multi-lender platforms, a customer or client only needs to complete one simple online application, which gets sent to multiple lenders simultaneously. Decisions are received immediately. Applying for financing doesn’t result in any hard credit inquiry, which means the customer’s credit score is not affected when they submit an application, so it doesn’t hurt at all to apply. In addition, Flexxbuy offers an in-house guaranteed monthly payment program, which approves 100% of applicants and requires no credit check at all to apply. To learn more about Flexxbuy, click here.
Lyndsey Brooke is the VP of Corporate Development at Flexxbuy, where her duties include strategic partnership development, business strategy and marketing. Lyndsey earned her J.D. from the Shepard Broad College of Law at Nova Southeastern University, and her Bachelor’s degree in Public Relations from the State University of New York at New Paltz.