Small bussiness - How do I sell Finance?

iwantasmallholding

Hi

My wife has set up a bussiness which is doing well, she has been trading for 12 months now and is fast approching the need to VAT register, but not quite there yet. As a way of increasing sales she was hoping to be able to offer finance on the products that she sells, the items vairy in price from about £300 - £2000 per unit, and we both think this will boost her sale massively because no one else in her market offers this service.

Does anyone know how you go about registering to sell finance
What company would be good to go to for a small bussiness
Any pitfulls with the idea anyone can think of?
Would she get commission for the finance or just the boost in sales?

Any advice would be greatfully recieved as her bank manager is on holiday for 14 days!

Thanks

Nick (and poppy)

InsideInsurance

Big banks generally arent interested in this sort of thing unless your going to be putting a £1m+ via the finance.

There are a number of smaller players in the market that offer it but I cannot vouch for their standards. Have a look at a few other independant stores who offer credit (Hi Fi and PC shops may be a good starting point) and see who they are using.

If you are offering interest and fee free credit then expect to pay for it. If it is low interest/ fee then you may be break even. If it is high interest then you will ge a share or fee.

The biggest pitfall is if it is a standard lending arrangement you need a consumer credit license and to register with the ICO for around £800. Plus your customers experience will be coloured by the experience they have with the lender so they could think your service was great, get bad treatment from the lender and they are more likely to say to their friends/ family that you messed up etc rather than saying Black Horse Finance (or equiv) did.

moneypooh

My initial thought was why do others not offer the same service? If it's viable and easy to do then surely others would already be offering this. Contact business link for advice about finance providing. Our company looked at it, but decided against it and offered a 28 credit account instead which is far better to control.

I hope you find a suitable solution.

paulwf

Check if you have a trade association or similar body that has a deal in place, this was the case with the industry I used to work in and it worked well. Offering finance definitely clinched a few sales and also got people to spend more, I think it is worth trying given the price bracket you mention.