There are three things certain in life: death, taxes and people getting confused about equipment finance.
Sadly, equipment finance is actually a really simple topic, but for one reason or another, a lot of myths and rumours exist around the subject.
In spite of that, it still remains one of (if not the) UK’s most popular finance options – and for good reason.
Equipment finance – which, by the way, is the same thing as asset finance – is a fantastic way to press fast forward on your business’ progress and get the equipment or assets you need to grow your business immediately, rather than having to wait to buy whatever you need outright.
So in spite of the huge benefits, what are some of the most common myths surround equipment finance?
Myth #1: “It’s too complicated to offer equipment finance.”
Now we’re not going to start aiming shots at similar companies to Love Finance, but as in any industry, there are some companies who are easy to work with and some who aren’t.
The ones who aren’t will make equipment finance sound complicated, not because they’re bad people who are completely bad at their jobs, but just because they don’t understand it well enough.
A good partner, however, will make offering equipment finance to your customers an absolute doddle, with support from account managers available constantly to help you get more, lucrative deals over the line.
And on top of that, high-quality finance partners will even have automated tech in place to help you to offer as smooth a process as possible.
Myth #2: “It doesn’t impact sales.”
There’s more chance of the Loch Ness Monster being found than this one coming true.
Research from the Finance and Leasing Association found that – even in spite of all the Brexit drama and uncertainty going on – the total amount of asset finance new business in the UK grew by 6% in the 11 months up until November 2019.
Considering the fact that society is generally shifting from purchasing outright to paying monthly for everything else – including cars, phones, holidays and even their furniture – this growth trend is one that may well become the norm in years to come.
The key to success will be getting in and being one of the first to innovate in your sector, offering a flexible finance solution to your customers before anyone else can.
A new partnership that offers the capability of financing a wider range of asset investments and credit backgrounds opens the door to even more success.
Myth #3: “It’s expensive.”
Again, this one comes back to who you work with.
Of course equipment finance partners could offer ridiculously high rates – but that’s just because they don’t understand your business, customers or products well enough.
And while it’s true that finance options are more costly than simply buying something outright, customers aren’t paying more for the same product, they’re paying for the flexibility.
And it should be up to your customers to decide whether or not they would prefer to take a small hit on the equipment in order to keep cash flow strong.
What’s more, good lenders will even offer your customers ‘Buy Now, Pay Later’ terms, meaning they can start making money on their new equipment for three months before having to part with a penny.
Myth #4: “Customers don’t want finance options because they never ask.”
This is another ridiculous equipment finance myth.
As Henry Ford famously said, “If I’d have asked my customers what they wanted, they would have said faster horses”.
Given the growth stats and the fact that the large majority of businesses rely on strong cash flow to survive and succeed, equipment finance – if offered to people – becomes a highly attractive way to do business.
And thinking about it a little differently, how many times has a company told you they “Just can’t afford it”?
And now imagine if every time they gave you that age old excuse, you could counter by asking if that’s the only thing stopping them from buying, and then offering them an affordable monthly repayment option with three free months instead?
If you like the idea of closing more deals, modernising your approach and making life easier for your customers, equipment finance isn’t something to be afraid of, but a finance option to be welcomed into your sales arsenal and customer offering with warm, open arms.
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