Customer Finance Programs Key to Increasing Technology Sales
While studies show that technology spending is once again on the rise, there's a reason you haven't heard a collective sigh of relief from the software industry. While many budgets are once again allowing for the purchase of enterprise software, hardware and peripherals, there's no question that today's purchasers are smarter, savvier and more selective than ever.
Even though the purse strings have loosened, competition is at an all-time high. It's no longer enough to provide a software solution that meets the potential customer's needs, or even to provide it at the best price. Today, smart vendors are constantly looking for ways to stay one step ahead of the competition.
While increasing sales is always part of a competitive business strategy, software development companies often overlook a simple method of accomplishing this objective - making it easier for customers to buy.
One option increasing in popularity among software vendors is to establish a customized finance program that provides no-hassle financing solutions for your prospective clients. In addition to "one-stop shopping," your customers can reap the other benefits of financing that make it easier for them to commit to technology purchases, including:
100 percent financing -- Many finance companies offer 100 percent financing for the cost of software and maintenance contracts, which requires no down payment. Because customers don't have to come up with a down payment, they can make a purchase immediately, rather than hold up the sale with a "wait and see" mentality that often accompanies a dip into cash reserves. It also allows your customers to invest more capital in revenue-generating activities.
Improved cash flow management - With software financing, your customers can conserve capital for reinvesting in their business and improve budgeting accuracy through fixed monthly payments. Financing also makes it easy for customers to access multiple-year budgets by paying for the benefit of your software over its useful life.
Flexible payment structures - Customers can optimize project budgets by taking advantage of the flexible payment structures available through financing to maximize the return on their investment. For example, with software financing, customers can ramp up payments to match the revenue generation of a new technology project that is utilizing the software being financed.
While financing provides a clear advantage for the buyer, when a program is well planned, the list of advantages for software developers, distributors and resellers can be even more beneficial.
Improved Customer Relations
As noted above, financing packages add value for the customer by enhancing their buying power, offering greater flexibility and providing convenience. It also increases their satisfaction through the ability to leverage their budget to acquire the total technology solution - which could include software, hardware, service, support, integration and training - rather than only the parts and pieces they could afford through an outright purchase.
Shorter Sales Cycles
On the sales side, any customer who expresses some interest in a product seems like a good lead. However, there are many times when the question of how to pay for the new software prevents the sale from happening. Time lost on dead-end deals can be eliminated when financing is part of the sale, as the ability to pay is immediately considered in the equation. In addition, many finance companies now offer fast, easy credit and documentation processes, so you can complete a sale quickly and avoid costly processing delays.
Another benefit is that as software needs are being discussed in the sales process, the finance specialist can work with the chief financial officer or accountant to determine which financing option and payment plan best suits business needs and cash flow.
Direct customer financing can also save software vendors millions of dollars each year by reducing the number of days a sale is outstanding. Consider a company with quarterly cash sales of million. On average, it can take 45 days to collect payment. Assuming a borrowing rate of 6 percent, the 45-day lag in payment results in a carrying cost of 1,204. If the same numbers are run with a leasing finance program that generates payment within 2 days, the carrying cost drops ,253, saving the company more than 8,951 in one business quarter.
The Big Picture
Overall, equipment financing programs can:
Generate larger, more profitable sales faster;
Increase account control;
Improve sales efficiency and productivity;
Lower days-sales-outstanding;
Improve cash flow;
Differentiate your company from its competition; and
Provide complete solutions for your customers.
Taking the Next Step
After identifying an interest in offering flexible financing as part of the sales process, the next step is to develop a finance program. By partnering with an experienced leasing company to develop a finance program for your customers, you can transfer all of the uncertainties of extending terms to your customer to the finance company.
Partnering with an experienced finance company also means you can concentrate on what your company does best - developing software - while letting a finance expert handle the intricacies of a finance program. Put simply, by working with a third party, your company will receive all of the benefits with none of the risk.
Whether you choose to refer your clients directly to your financing program partner or to work with a third-party finance partner to develop an in-house program, it is essential to choose an experienced equipment finance partner. During the sales process, the finance expert will be working closely with your customers, and it's important that his or her actions and service levels reflect your company's ability to meet your customers' expectations. When searching for a finance partner, look for a company that:
Is flexible and willing to work with your management team to develop a program that will meet your financial objectives;
Is experienced in the IT and software finance world, since the sales process, client-decision criteria, and revenue recognition issues are different than that of capital asset sellers;
Provides marketing support and materials to help you promote your financing program
Is willing and able to provide your sales team with materials and training to ensure sales team members are comfortable and easily able to raise financing as an option with their clients; and
Is a financially stable, long-term business partner.
Used Car Finance Calculator Online
It is very common applying for used car loans when purchasing a used motor car but don't possess enough ready money available at the time to cover its costs. In Australia, there's lots of finance company that advertise for used car credit facilities. These lending companies have various policies and packages.
When looking for used car finance, you must evaluate the assorted finance packages which can be obtainable by automotive financial institutions. Take particular notice at the car loan interest rates, car finance terms, repayment term, duration of time before the finance gets approved, the loan company's fees and charges and any penalty fees if you make your payments at an earlier time, amongst other items that build up the total finance package. Even though the used car loans rate is one of the most important components of the deal, additional items would be best not overlooked.
Aside from what has been already been mentioned, in your own time to go through the used car loans pricing quote and find the one you will be most comfortable with. To get the best car finance package, be patient as you do your research. You can make the job faster and easier seeing as a effortless seek in the internet can offer you a lot of the information you require on used car loan companies. You can rank the bank car loans according to their interest rates or other criteria that you wish. If you don't have the time to do research, having a car finance broker do it for you is an alternative.
When you want to get serious about applying for finance for used auto finance, ensure you realize the payments that you will need to make. It is simple to do this via a car finance calculator, which is available on the websites of most auto loan companies. This simple car loan calculator, with simple interface, assists you to determine the length of schedule over which you will pay back the finance.
After settling on a number of possible car loans lenders that you hope to apply for the car loan, it would be a good idea to verify the background of the financier. Will it be a car loans company that you approve of ? What is its history in loaning and dealing with used vehicle finance borrowers ? What about its integrity, is it known to be an honest company ? These are a quantity of the a small amount of things that should steer you in filtering out the potential companies and in due course remain with the car finance company that you will have a loan of the auto car loan.
There are generally two types of used car loans offered by car finance companies: a personal loan and one secured on the car. The finance is normally offered over the payment period which is between five to seven years, with the period of the loan especially much depending on the age of the automobile that you're buying. Some car finance companies do not provide finance for motor vehicles that happen to be over seven years whilst others lower the car finance period. This differs from bank to bank so do not forget to ask the company about their guidelines on old vehicles. A finance broker specializing in vehicle finance may also be capable that can assist you on this.
As well as very old cars, some car loans companies will not take on used car loan applications for vehicles which are imported. For anyone who is purchasing an imported vehicle a personal unsecured loan could be your best alternative. Note that individual finance incurs greater car finance rates than secured finance.
Do not forget that the finance that you are applying has add-on finance options you may possibly want included. A few of these may possibly take account of car insurance on the motor vehicle, warranties on mechanical breakdown of the vehicle, unemployment credit protection, disability and or death insurance etc. If these items are approved by the car finance company, don't forget that you will still need to finance the loan over the conditions that are laid out within the finance contract.
Another important factor for consideration is the loan source itself, and the ability of the car finance company to raise the cash. Not all loan companies use their own funds, and while some are financially robust enough to weather the storm of a recession, others are not.
Steps to take before availing a Car Finance
There is hardly any person today who pays all the money upfront towards the car price. Most of them take to the car finance route to own or possess the car of their dreams. In simple terms, the car finance is a loan taken to buy the car for which you have to pay some monthly charge, called the interest rate. Some of the basic steps which you can follow to avail of this facility are the following:
1. Check for the options that you have for the financing: There are a number of different providers of this service but this does not mean that you can go to any of these and say that the deal is done. It is better to have a look at what the different providers are offering you. These providers could be the dealerships, credit unions or banks or even take the second mortgage route of financing. It is good to understand when to make use of their respective services.
The dealerships provide the most convenient way of car finance. They might charge a bit higher interest rate but you can get the loan when you cannot get the same from the other sources. Also, you can even avail of the same when the banks are closed. The credit union or the bank can also provide the car loan but they look into the history of the credit worthiness of the buyer and require quite a bit of documentation to do. The second mortgage route shall be tread with due care since if you fail to make the payment once, you risk losing the car as well as your home.
2. What is the credit score that you have: This is a part which is looked into by any organization which is providing you the credit. If you have a negative credit score, then you might be denied the loan or charged a higher interest rate for it. If you think that you have a bad score, you can make efforts to convert it into a good one.
3. Make a choice between the special offers of rebates or interest rate incentives: The dealers do bring out advertisements of the rebates when some of their models are not selling. This does mean that you get these cars at low prices. However, to get the low interest rates, it is desirable that you have a good credit score or credit rating.
4. Down payment and repayment: Some of the financers might require you to make a minimum down payment of a lump sum amount, rather than opting for the full financing option.
5. The Car finance choice shall not be a hurried decision since you are going to pay fix monthly installments and if you do not make a right choice at the time of getting the loan, you might end up paying more for the next couple of years. So, take your time, check with the different options and then take a decision on any one of these.