How To Sell More High Value Equipment
by Tom Miles
Often when faced with a major expenditure, customers can deliberate, delay and even pull out of a sale. By offering an alternative, less daunting finance option, manufacturers and resellers can close the sale quicker, and frequently up-sell to a more effective solution for their customers.
Many of the resellers that I work with are able to offer a monthly payment option to their customers, by using our service. It is the difference between, for example, a c. £100,000 capital expenditure (which could be a daunting figure) and a monthly payment of c. £3,150 over 3 years, an option that seems much more attractive and manageable. Finance options can be offered for any transaction of £2,000 upwards.
The process works as follows:
- Customer chooses the finance option;
- Proposal sent to one or more lenders;
- Following approval by the lender and agreement of terms by the customer, the documentation is signed;
- Upon delivery of the equipment, the lender releases payment and the customer agreement commences.
Compare this to offering your customers extended payment terms of 60 or 90 days where you will be out of pocket (having paid the supplier for the goods) for a much longer period of time. When a customer opts for finance, this gap is bridged and you are paid promptly upon delivery.
Leasing, one of the various options available, has many benefits to your customers, including the tax advantages of being off-balance-sheet and the fact that 100% of the rentals can be offset against Corporation Tax. This means that often the customer will pay less than if they paid cash, with the added benefit of keeping the initial capital within the business for growth, additional staff, marketing and so on.
A key thing to remember is that there is no cost to suppliers – the customer pays interest on the amount borrowed and you get paid quicker and have the opportunity to sell higher value equipment by overcoming cost objections. The arrangement with the customer is flexible so that they can upgrade equipment and services from you during the life of the agreement, their payments being adjusted accordingly.
I have access to the cheapest providers of this kind of finance, so even if you already have a similar arrangement, we are likely to be able to improve on the available rates and therefore your bottom line.