Common Myths of Equipment Financing
The story about NASA developing a space pen while the Russians used a pencil isn’t true. NASA also used pencils. Humans have more than five senses. The actual number ranges from 9 to over 20. Kind of amazing the things we come to believe that are not true. Here are some myths of equipment financing:
- “It’s too complicated to offer financing.”
- Nonsense. Sure there are providers out there that make things too hard, but there are competitors of yours that make equipment sales and service too hard too! A good partner can provide simple programs, fast decisions, and committed customer service. It is critical to find a partner with the technology tools and capabilities to drive a better customer experience.
- “It doesn’t impact sales.”
- 83% of equipment purchasers would say it helps them make buying decisions to have a payment option. Developing a finance partnership for equipment sales shows a first-year average of 16% sales growth for teams that have never offered the solution before. A new partnership that offers the capability of financing a wider range of asset investments and credit backgrounds opens the door to even more success.
- “It’s expensive.”
- Equipment finance companies can offer the most aggressive terms because they understand the equipment. Sure, there may be a bank that offers a 3% interest rate, but it’s for a 24-month term where the customer will have to pay huge monthly payments that effect their cash flows. Equipment finance guys are all about maximizing the cash flow of your customers. The better their cash flows, the more equipment they can acquire from you!
- “We only bring up financing if the customer does.”
- Nearly 70% of all equipment is financed. Among small businesses, the number is closer to 85%. Why would you wait to bring up something that can power your sale forward if you do it right and kill your sale if you sit on the sideline?
At TimePayment, our FinTech solutions have helped equipment sellers close more sales by offering creative financing with innovative technology tools. It’s time to move beyond the myths and grow the business again.