Offering my customers finance

[Jazzyjeff]

hi looking to offer my customers finance on double glazing products everyone I have spoke to say you have to turnover a minimum of 250k and trade for 2 years is there a Way around this the company was set up in May 2017 but only started using the company in December 2018 so filed £0 accounts last year

 

[Gordon - Commercial Finance]

What you're looking for is consumer finance or often called retail finance.
There are loads of companies which offer this, but most will have a minimum turnover requirement at least. You may be able to find one which will help you out if you look hard enough.

What is the price point for your product?
There is an option to offer finance yourself - I believe you can do this without regulation as long as you don't charge interest, and you spread it over a maximum of 4 payments. Worth checking out the FCA website to confirm that. It's then up to you whether you take the risk of supplying the product before all the instalments are paid or withholding until all payments are made.

Presuming your products are probably in general less than £2,000, the kind of customers who can't get a credit card or save up the money, are probably the kind who you wouldn't want to risk extending credit to anyway, so definitely don't risk having to go and repossess someone's windows when they miss a payment. That would be a very sticky situation indeed.

 

[Jazzyjeff]

Thanks for your reply Gordon. Products range from £500 up to £35,000 I believe with being able to offer customers finance my turnover will go from £70k up to £300k easily but no one will give a small start up business that chance which really does suck

 

[AllUpHere]

You need to learn to walk before you try to run. I've just read your thread in the insolvency forum and offering credit will just allow you to dig yourself into a much deeper hole.

 

[Jazzyjeff]

This is for a separate business Alluphere

 

[Blaby Loyal]

This is for a separate business Alluphere

That's all well and good but your Thread in the Insolvency section shows to me a level of unfitness for you to act as a director of a limited company. For you to now want to offer finance in your newco is alarming.

You are fortunate that your other company's creditors are below the magical £100,000 threshold otherwise I'd be putting money on you being disqualified.

 

[tony84]

I believe you can do this without regulation as long as you don't charge interest, and you spread it over a maximum of 4 payments. Worth checking out the FCA website to confirm that. It's then up to you whether you take the risk of supplying the product before all the instalments are paid or withholding until all payments are made.

I thought it was 3 payments, but its easy enough to check.

I doubt they want to be on the hook for up to £230k according to how much their sales will increase by if they offer credit. On a side note, do you really think business volumes will quadruple if you offer finance? If it were that simple, everyone would offer finance.

 

[The Byre]

Thanks for your reply Gordon. Products range from £500 up to £35,000 I believe with being able to offer customers finance my turnover will go from £70k up to £300k easily but no one will give a small start up business that chance which really does suck

Now that's what I call wishful thinking!

That's all well and good but your Thread in the Insolvency section shows to me a level of unfitness for you to act as a director of a limited company.

This!

Fortunately retail finance companies perform due diligence, so you can stop building castles in the air at other people's cost.

 

[AllUpHere]

This is for a separate business Alluphere

Irrelevant. Taking people's money and not paying your creditors is one thing. Having clients gain finance and then being unable to complete the job because you have run out of money (and credit) is going to bite you on the arse. Add a sprinkling of VAT debt, and your willingness to try to deceive to get yourself out of hot water and you are going to get yourself right in the shit.

 

[Mark T Jones]

Someone appeared on here recently spamming offering this service.

It stuck in my throat that they charged a fee for a commission based service, but that might be the way it is.

There are brokers and some independent lenders who specialise in this area but it will take some digging to find them (or to find the ones who are actually good at it)

You will also need FCA authorisation

I’m sure your turnover projections are wildly optimistic ( possibly provided by someone like our recent spamming friend). As has been pointed out, the decline rate will be high

 

[Mr D]

Thanks for your reply Gordon. Products range from £500 up to £35,000 I believe with being able to offer customers finance my turnover will go from £70k up to £300k easily but no one will give a small start up business that chance which really does suck

May get some who use finance. Though they can likely also easily arrange their own finance before buying from you.

Don't bet on increased turnover until you see the turnover increasing. Your own sales efforts may make a much bigger difference than finance options.

 

[Gordon - Commercial Finance]

Wasn’t aware of the other thread in insolvency but I will need to have a look now.
Your estimate of how much you will increase turnover just by offering finance is pretty far fetched.

 

[MBE2017]

As can be seen most feel your expected increase in turnover due to being able to offer finance without foundation, I would be surprised if you even got a 50% increase.

I have sold various products on finance, including the ones you mentioned for many years from well known established brands with low rates, average salespeople managed 10/20% on finance, the best I have seen is 40/60% of business written consistently on finance.

 

[Financial-Modeller]

Thanks for your reply Gordon. Products range from £500 up to £35,000 I believe with being able to offer customers finance my turnover will go from £70k up to £300k easily but no one will give a small start up business that chance which really does suck

Why don't the customers who want to buy £230k of double glazing from you but don't have the money to do so, just borrow it from their bank?

 

[Mark T Jones]

Why don't the customers who want to buy £230k of double glazing from you but don't have the money to do so, just borrow it from their bank?

There are any number of reasons why people don't just go to their bank - mind you at £230K they won't be getting an unsecured loan..