Retail Finance Providers
3 min
Whether you’re new to finance or considering a change in provider, use this practical list to tick all the right boxes – and find the best lending fit for your business.
1.Identify Your Needs
When considering a finance provider, it’s essential to identify your specific needs. Think about…
Term length
Retail finance lets customers spread the cost of a purchase over a period of months (typically from 3 months onwards). Interest free finance options tend to stretch over shorter periods, while interest bearing finance often supports longer term borrowing. Find out more about retail finance term lengths here.
Credit bandings
Customers usually fall into a specific credit banding (for example, Excellent, Good, Fair, Poor), which influences their finance options. Think about your customer demographic and whether they’d be approved for your preferred finance options. Find out more about credit score bandings here.
Profit margins
The margin you have on product will help you decide whether you need interest free finance, interest bearing finance or both. While interest bearing finance passes the cost of borrowing onto the customer, interest free finance requires you, the merchant, to pay borrowing fees to the finance provider instead of the customer – so be sure your margins can take the hit.
Average order value
Finance providers normally have minimum and maximum spend thresholds on their solutions. Knowing how much customers typically spend will help you determine which finance provider you need to help them spread the cost of a standard purchase.
Research providers
Once you’ve identified your needs, conduct thorough research on potential credit providers. Here are some initial factors to consider when deciding which finance provider to reach out to:
It’s always worth asking any prospective finance provider to put you in touch with their satisfied customers – especially ones in your industry. If you attend networking events for your sector, ask around to see which finance providers are recommended – and which to avoid.
Trustpilot and Google review ratings are another obvious way to measure satisfaction. Investing time in this research phase will help narrow your options down to a select list of providers – saving you a lot of time and potential problems in the long run.