Offering Finance

[davidgilham]

Hi,

I'm looking at offering finance to customers,

I want to look at spreading the cost of our service/products over 4 months, the first being paid at the point of purchase and 3 more payments to avoid having a credit license.

I also need this line of credit to be interest free,

Has anyone got any advice?

Kind Regards

David

 

[PaulThompson]

Hi David
A couple of things to consider;

• Are you going to fund this yourself or use a lender to do it for you?
• How much will it cost you to not have payment in your bank immediately?
• What if someone is late/can't/won't pay, what redress would you expect?

Hope this helps focus, drop me a line if I can help further.

 

[davidgilham]

Sorry I need to clarify,

I want to basically use a lenders money to offer finance to customers end users, for example a repair will need doing in a garage for a vehicle but the end user can't afford the bill upfront.

I want to be able to offer finance for the end user to be able to spread the cost of the repair over 4 months.

How would I find a lender and how would I offer a low or zero interest rate?

 

[Energise Accounting]

At the end of the day the lender wants to make money, so the finance costs would have to come out of your profits.

 

[tony84]

Or added to the clients final bill.

As the OP would not be the finance provider I dont think they would need a credit license - although I do stand to be corrected on this.

 

[PaulThompson]

If you are acting as a credit broker then you need a licence, the way around this would be to act as an agent of a broker (like us) so that you operate under their licence, that way the broker would take care of the FCA regulations and you could get on with your business
If you want to offer it interest free then the cost of the loan has to be factored into your original invoice (as you are going to be paying that cost) - is this going to make you too expensive?
Sometimes it's best to be honest!
Give me a shout if it's something you'd like to consider.

 

[PGI COVER]

I like this discussion. Here is an operator thinking outside the box, and lenders/brokers wanting to help to achieve his aims. If the cost of finance to the operator is not too high and can be factored into the repair costs such that the end user can accept it, then this might work as a concept. Will be interesting to see this thread develop.

 

[Energise Accounting]

The idea is good in principal however, you are aware it will make you more expensive than your competitors. That said people may be prepared to pay the extra, in order gain the benefit of staggering the payments over a number of months.

 

[PaulThompson]

If you want I could give you some indicative figures?