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Is it a good idea to offer consumer finance??
Hi all,
We have had some issues recently with customers failing to pay on time or unwilling to go ahead with work because of our ‘payment on completion’ policy, especially on the more costly contracts. Has anyone ever considered partnering with a consumer finance company and offering finance to the customer to be paid back over several months?? Not sure if this is a good idea or not?!
Also, I just downloaded some terms & conditions posted on here a few years back…do I need to have these ok’d by a solicitor? Or can I just go ahead and pass them off as my own handy work, no questions asked?! 😀
Replies appreciated, Cheers,
Caroline -
8 Replies
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Hi Caroline, If your talking about factoring I’d stay clear if you can as it gets very expensive. I can’t understand why customers are put off with payment on completion.
Cheers John
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Me neither John, I think most people expect 30 days with the view to eekin it out for even longer! Don’t get it..why get work done if the money isn’t there to pay for it?!
Just tryin to find other options/incentive for those feelin the pinch at the mo but get your point, hardly worth it if its costing us more money.
Thanks
Caroline -
maybe try it the other way around…
they pay in 1/4’s over the space of 120 days, then you supply the signage, bit like a xmas club!
i did this for a customer once, he wanted to pay in installments for a not very big job so i let him do it but, in advance, suited him and i got paid on completion!
Hugh
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I’m not fully understanding people at the moment.
We have once let the customer to pay on a 6 month invoice but again it was only a small job and we knew them well.
If they haven’t got a account and struggling but will be able to pay you on a 30 day (as they all say) why cant they put it on a card. Start ups generally put there expenses on a card and worry about it later.
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Can you legally offer finance? Im sure I heard somewhere before that you had to be registered to offer finance services.
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I was talking to an ‘old-school’ sign guy recently, (he was operating about 30 years ago) and at the time his company offered people the option to finance their signs, much the same way as someone might finance a car. He used a company who provided finance to the customer and received a predetermined monthly amount until the sign was paid off.
Thanks
Caroline. -
Caroline
You can offer finance through a third party finance company, the problem is, they would need quite a large turnover to be interested in providing the credit.
Your customers would still need to be credit worthy though, and it will maybe put people off if the interest rates are high.
A sign is not like a car, where there is a some equity in the product, a sign is not saleable item should the the buyer default on the payments.
Best to get a credit card machine and let the customer use his own credit,
if they cant do it on a card, then I would steer well clear, as most finance companies would.Peter
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Understood Peter…words of wisdom
Thanks
Caroline
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