Consider these compelling reasons and actionable tips to promote equipment financing.
If you could make it easier for your customers to buy from you, wouldn’t you?
Deciding the best way to fund an industrial machinery or commercial equipment acquisition is a challenge that all equipment buyers, especially small and medium companies, face when making a purchase. Buyers often are not aware of all their options or do not understand them, so it is left up to the vendor to educate them.
Help Me Help You
During your sales pitch, do you offer financing to your prospective customers, or do you leave them wondering how they are going to pay you?
U.S. equipment manufacturers and vendors sell products that solve problems or create new opportunities for their buyers. Vendors, therefore, gain a significant competitive advantage when they also provide a solution for their customers to pay for the equipment.
You can turn more prospects into customers by promoting financing as part of your product package in all your sales and marketing efforts. Financing helps buyers acquire the equipment they need while helping you close more deals, increase sales, improve customer satisfaction and loyalty, and ultimately grow your business.
Financing helps customers to buy the equipment they need and vendors to close a sale faster.
The opposite is also true. Vendors can lose transactions if they leave it up to the buyers to figure out how to pay for the equipment. You will lose momentum when customers need to research and shop around for financing options. While buyers wait for traditional financing institutions to evaluate their credit, they might rethink their options, change their minds and buy from a competitor that offers better or more aggressive payment terms.
When buyers learn upfront the financing options available to them, they can focus on the features and benefits of your products instead of worrying too much about the price tag. But how do you approach the topic of financing with your buyers? What do you say to them?
Let’s Talk About Equipment Financing
To make a powerful sales pitch, you first need to understand the buyer’s equipment needs. The same goes for financing. To effectively offer financing to your customers, you should understand their financing needs.
The good news is you do not need to be a financial expert to add financing to your product package. What you need is a partner—a third-party to serve as the financing arm of your operation—that can perform the financial analysis and provide flexible loan, leasing and financing solutions that enable customers to buy your equipment at no risk to you and that allow you to get paid quickly.
Before discussing financing options with your buyers, you will need to gather basic information to get a sense of their financial situation and expectations.
Keep the Flow Going
Let’s face it—applying for loans from traditional banks can be as pleasant as going to the dentist. A common mistake equipment manufacturers and vendors make is setting up financing as a completely separate process and a last step in their sales cycle.
It is not a good practice to wait until after you have established a good relationship with a buyer and convinced him your equipment is the best choice to introduce a third-party and start the application process from square one. The flow and momentum you had established has now come to a complete halt.
It is much more effective to talk about financing and payment terms early in the process and to always keep the flow going.
- Have your sales force pitch financing early in the cycle.
- Understand your buyers’ financial needs and expectations.
- Include your financial experts in some of the conversations so that they can get acquainted.
12 Key Questions to Ask to Understand Buyers’ Financial Needs
To understand the financial needs of your prospective customers, you have to understand their business. People usually love talking about their businesses, so going a step further to gather a bit of extra information should be easy to incorporate into your sales pitch and meetings.
Sales reps should always be looking for buyers’ pain points and be able to address them directly with solutions. Use the following talking points and questions to guide a productive conversation about financing:
Assess the Real Impact of the Equipment on their Business
Having basic information about the asset is key when evaluating and structuring a lease or loan for a potential customer.
- How will you be using this product? Is it replacing old equipment? Where will the equipment be installed?
- How critical is this equipment for your business?
- Are you creating a new product or line of business? By what percentage do you expect your revenue to grow after putting the equipment to work?
- How long do you expect to keep this equipment? Are you planning to replace it within five years?
Get a Sense of Their Current Financial Situation
Although your financial partner will perform a deep analysis with financial and bank statements, it is always useful to get customers’ perspective on their current financial situation and business positioning.
- In recent years, have your sales grown rapidly or slower than expected or desired?
- How do you view your competitive position in the market?
- Have you tried approaching any banks or traditional institutions for financing recently? Did you get the service you were expecting? Were there any setbacks? How was the experience?
- Do you have audited financial statements you can provide?
Ask About Their Specific Needs and Expectations
While most small and medium businesses usually need guidance in the financing options available to them, some already know what they need. It is important to ask the straight questions.
- What would be most helpful in managing your cash flow to repay the equipment? Low overall monthly payments? Would you need flexibility in payments during the first few months of the contract or stepped payments?
- In how many years (what term) would you feel comfortable repaying the equipment?
- If looking at other products, have any of those companies offered you payment terms?
- Would you like to fill out a credit application right now?
Train Your Sales Force
The best sales reps not only know their products inside and out, but they also show industry expertise and understanding of market trends, competitors and disruptors. Being financially literate adds a level of sophistication that will inspire confidence in your buyers. The more knowledgeable your sales force is, the more your customer will trust you.
Experienced sales reps need to be able to talk finance (true leases, operating leases, FMVs) and be backed by the right financing partner that can walk the talk. To connect with prospects, they need to speak about topics that are important to the buyers and that affect their bottom line. Sales reps that can address the financial concerns of your prospects will become your superstars.
Don’t over promise
When offering financing to buyers, vendors should never guarantee financing or imply that it will be approved. Do not forget to mention the fine print: All financing offers and quotes do not constitute a commitment to lease or finance the equipment and are subject to credit approval and executing legal documentation from a financial institution.
Download our eBook, How To Make It Easier For Foreign Buyers to Purchase Your Equipment, to learn how to close more deals, get paid quickly, attract more customers, increase your sales and grow your business—in a few simple steps!