A Dealer financing program is where an equipment dealer or reseller has established a relationship with an equipment financing or equipment leasing company or companies, to provide equipment financing options to its customers.
If the dealer is owned, licensed, or franchised through a manufacturer, then they will likely promote any manufacturer financing programs available to them.
If a dealer does not have access to a manufacturer supplied financing program, the next best option is to introduce the customer to equipment financing companies that 1) finance the types of equipment the dealer is selling, 2) is prepared to finance the range of price points that can be offered, and 3) can provide financing that fits the dealer’s customer profile in terms of the average or most typical customer’s credit and financial profile.
Dealer programs that do not come from a manufacturer are either administered through a single equipment financing company or through an equipment financing broker.
First of all, does your dealer financing program fit the profile of at least 80% of your customers?
If not, that means that the customers are left trying to find their own equipment financing to close the deal which could very well land them at another dealer lot where better financing is available.
Second, is your dealer financing program responsive to your customer’s needs and your sales process?
For instance, if you require 24 hour turnaround with an equipment financing application to secure the sale in a competitive market, is the equipment financing company or companies you are working with even capable of doing that? Many times your financing partner has a generic administration desk that fields the application requests for all their customers. This can result in slow turnaround and customer frustration as the more agents working for the financing company, the less each on is going to know about your business and the equipment you sell.
Third, does your dealer financing program allow scalability of your business?
Basically all equipment financing companies have some sort of portfolio requirements that do not allow them to have more than a certain percentage of deals in any particular industry or customer segment. If they run out of room in their portfolio for your business requirements, you can be left scrambling to find an alternative while your customer is waiting for a financing solution to be offered.
If you have a dealer financing program in place, or want to get one in place, your next best step is to give us a call so we can quickly evaluate your business model and customer requirements and provide dealer financing program options for your consideration.