Why Your Customers Should Finance.

posted by Dusty Kelchen on Thursday, June 23, 2016 in Specialty Markets Group

Most business owners at some point have uttered “I’ll pay cash” to their equipment/software provider when asked about financing their purchases. The buyer who does this is actually in the minority, according to the Equipment Leasing and Finance Association. They say more than half of all money (62%) spent on buying software and equipment in the U.S. was financed, and that trend continues to rise.

Here are four reasons your customers should consider financing their equipment and software:

1. Preserve cash and be prepared for the unexpected

Equipment & Software is expensive, and when it comes time to make a new purchase it can put a dent in capital that’s needed for things like personnel, advertising, and inventory. When unforeseen things happen your customers may need their cash to get through it, which can be difficult when it’s tied up in assets.

2. Lock in a rate

No doubt you’ve noticed interest rates have been at historic lows for some time.  It’s inevitable that interest rates will increase; the question is when.  Considering all the speculation and discussion about the Fed increasing rates in 2016, it’s a good bet to lock in today’s purchase and pay with tomorrow’s dollars. 

3. Easier budget management 

By financing your customers have the advantage of implementing a fixed monthly payment into their annual budget making business planning much easier than trying to budget every 3 to 5 years out.  Not only can they finance the actual equipment and software, but in many cases sellers can include “soft” costs associated with the purchase such as installation, training, configuration and maintenance.  These additional items can add up quickly, but can be made manageable by using a comprehensive finance agreement spread out over a predefined term.

4. Keep up on new technology

Manufacturers and providers are constantly looking for better and faster ways to get things done.  Technology needs to be updated and refreshed. Your customers could find themselves behind the technology curve and be missing out on the latest technologies that get jobs done faster with less manpower.  By financing their purchases they are including this obsolescence protection in their long term business plan.

 

Financing equipment and software purchases can be a great addition to the financial management of a business.  If your customers are in the market for new equipment/software and typically pay cash, you should urge them to consider the benefits of financing and how it can help their business.

 

Learn more about the GreatAmerica Specialty Markets Group or Contact Us to see how we can help you boost your sales with an effective finance program.

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About The Author

Dusty Kelchen is the Director of Strategic Marketing for the Speciality Markets Group at GreatAmerica Financial Services located in Cedar Rapids, Iowa.  Dusty is responsible for building brand awareness within the light industrial/construction equipment and business software solutions markets. Prior to joining GreatAmerica, Dusty worked in the publishing industry as a marketing manager focused on product development and targeted delivery strategies. Dusty has 13 years experience in the marketing field and a marketing degree from the University of Iowa's Tippie College Business.

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