Manufacturer financing programs

Manufacturers need to consider how end users acquire products. Offering financing is one way to take greater control in the sales process.

Manufacturers don’t typically sell to end users, and a large percentage of products are sold by resellers who sell multiple lines, so each manufacturer is essentially trusting that resellers are going to put its product at the head of the line.

Financing is a key way a manufacturer can differentiate how its product is sold among competing products. Subsidy financing that offers 0% rates can factor highly in the end user’s buying decision. Partnering with an equipment finance company also provides another point of contact who can talk about manufacturers’ products with distributors and support financing programs and special promotions.

To leverage the potential of offering financing, manufacturers need to commit to embedding financing into their sales process rather than using it as a backup plan. Among the benefits of making financing part of the sales strategy are quicker sales closes, increased average transaction size, and repeat/resell opportunities. For manufacturers who offer financing, roughly 30% of sales activity is generated by customers who need or prefer alternatives to outright equipment purchases. That’s potentially 30% of sales that manufacturers who don’t offer financing could be losing.
 

What to look for in a financing partner

Stability and transparency – Financials should be made available and carefully reviewed. The financing company should have a record of longevity and performance.

Well capitalized – Determine if the financing partner has an independent source of capital. There are brokers and other lessors that do not have access to their own funds and get it elsewhere.

Business alignment – Manufacturers will want partners to be experienced in their market and product segment. Ensure that the average product price matches the expertise of the equipment finance provider. Align with a company based on their servicing of small-, middle-, or large-ticket equipment sales, and with experience in direct and distribution sales channels.

Brand protection/support – The financing partnership at the manufacturer level is very sensitive. The manufacturer’s brand reputation is at stake and the equipment finance company must support it. The way the equipment finance company operates conveys the way the manufacturer wants to be represented in the marketplace. It is important to consider how they treat customers and represent the manufacturer’s brand.

Program resources – The resources an equipment finance partner is able to commit are critical to the success of the financing program and the manufacturer’s sales performance. Do they cover resellers across the country? Do they provide high-level service? This is especially important for small-ticket equipment because there are thousands of resellers and dealers. Will they train on the benefits of the program, from direct sales reps who sell, to distributors and resellers? Do they train the internal team (dealer or reseller base) for a goodend user experience?
 

Value added benefits

Manufacturers can find financing partners who will build and maintain Internet microsites for their resellers and dealers. These online repositories can be used to access up-to-date content and tools – including transaction quotes, current promotions, required documentation, and general leasing and financing information.

An understanding of the benefits and the straightforward steps to take make a compelling case for manufacturers to assert greater control in how their products end up in their customers’ hands.

Marlin Business Services Corp.
www.marlincorp.com

About the author: Phillip A. Bruno is chief marketing officer of Marlin Business Services Corp., a nationwide provider of commercial lending solutions for small- and mid-size businesses. He can be reached at 888.479.9111.