Finance

[makeusvisible]

I manage a digital marketing agency, and I am looking at potentially adding a finance option to our Website projects that fall within the £5k - £40k range.

Does anyone know of any good finance companies that work with service-based providers that we could work with in order to provide finance to our clients?

 

[Mark T Jones]

I manage a digital marketing agency, and I am looking at potentially adding a finance option to our Website projects that fall within the £5k - £40k range.

Does anyone know of any good finance companies that work with service-based providers that we could work with in order to provide finance to our clients?

I would strongly recommend that you don't.

Partly because there is a likelihood that you will come under the FCA banner (unless you specifically exclude sole traders/partnerships)

And partly because you will attract the type of customers who is likely to be declined for finance, which is a bit of a PR own goal.

 

[Financial-Modeller]

1. Are you certain that connecting your prospective customers with a lender will increase your profit by more than the costs associated with compliance etc?

2. Why can your prospective customers not borrow the money from their bank, which will probably cost them less in total than borrowing from your lender?

 

[fisicx]

I knew someone who tried this and ended up getting stung. Don't get involved in financing anything. Find a lender and partner up.

 

[Mark T Jones]

2. Why can your prospective customers not borrow the money from their bank, which will probably cost them less in total than borrowing from your lender?

The reason for this is that banks are useless at providing finance to small business - particularly startups, which are likely to be the principle market.

And therein lies the problem for the OP - it will attract clients who can't afford it - and lenders like people eho can afford it

 

[makeusvisible]

I knew someone who tried this and ended up getting stung. Don't get involved in financing anything. Find a lender and partner up.

Actually yes, this is exactly what we are wanting to do. We have no intention of providing the finance, we literally want to pass it to a lender who we can trust, to facilitate it.

 

[makeusvisible]

I would strongly recommend that you don't.

Partly because there is a likelihood that you will come under the FCA banner (unless you specifically exclude sole traders/partnerships)

And partly because you will attract the type of customers who is likely to be declined for finance, which is a bit of a PR own goal.

I don't believe we would be subject to FCA if we are simply referring a potential client to a third party who can provide finance. Obviously, this is something I would need to check.

 

[makeusvisible]

The reason for this is that banks are useless at providing finance to small business - particularly startups, which are likely to be the principle market.

And therein lies the problem for the OP - it will attract clients who can't afford it - and lenders like people eho can afford it

Our clients don't tend to be start-ups. Our price point is higher than what most startups would be looking at, and most of our clients are mid SMEs.

From our research, there are competitors offering finance options via third parties. If finance options give a .5% chance of closing a lead, it is worthwhile offering as an option rather than not.

 

[Financial-Modeller]

Have you checked the lenders that your competitors are using?

 

[makeusvisible]

Thanks for all the advice. Now sorted