Could interest rate be the least important factor in acquiring new equipment?

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What’s the interest rate? It’s like buying a new lawn mower and asking who manufactured the spark plug. Don’t get us wrong, the mower doesn’t run without it so the importance is obvious, but are you really concerned with it? When acquiring new commercial equipment, interest rate is important…just not as important as many business owners make it.

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Good Credit. Making money. Strong Business. Still turned down at the bank?

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Most business owners find mystery in the process of acquiring financing for your business. One year everything goes smooth as silk. The next year the process feels cumbersome and difficult even though your good credit is still good. While the reasons for these wild swings in the experience of borrowing money are many, there is one that surprises most business owners when it’s too late: exposure limits

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Grow sales 15-20% with no capital investment.

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Manufacturers, dealers and distributors find themselves in a highly competitive market. With margins are under pressure and differentiation a necessity, finding real opportunities for growth are challenging. Most opportunities for growth require injections of capital or significant training to evolve the way you do business. But there is one way grow way without having to learn anything new or tap precious capital reserves: offering a finance program to your customers.

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Heat up equipment listings: Only list a payment.

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For years, the software business has charged big bucks. As technology continued to speed up, they saw sales drop as other, cheaper solutions were born. Take MS Office. $499 per seat for Office 2010. Sales were…well…not great. But in 2013 they introduce a program where you can pay $8 per month per seat and always have the new version of the software. Sales exploded. What was the new innovation in the technology that fueled the growth? It wasn’t the technology, it was the money.

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Why you are losing more sales than you know.

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In a recent survey:

  • 77% of small business owners will choose the equipment sales organization that prominently features a finance option over an organization that does not—regardless of the brand.
  • 64% would prefer NOT to use their bank for equipment financing
  • 68% of small business owners look for payment over price.
  • 83% of small business owners will not negotiate purchase price if the payment fits their budget
  • 89% of commercial equipment sales organizations DO NOT lead with a payment.

Intrigued? Concerned? Downright Nervous? Let’s unpack the importance of these facts.

  1. If you do not offer or prominently feature your existing finance program…you’re losing sales. Customers will choose the alternative without even giving you a chance most of the time. And if you are assuming they’ll just run to the bank and knock out a quick loan…you’re wrong. Most of the time they just run to the competition.
  2. If you lead with purchase price, you’re missing the need of your customer. They are far more focused on finding an easy, affordable monthly payment than swallowing total purchase price. If you lead with $50,000, you are at a significant sales disadvantage to a competitor that offers $1,200/month.
  3. Most owners will not aggressively negotiate purchase price if you have offered a payment that fits their budget expectations. By offering a payment, you simplify the sales process and protect precious margins.
  4. If you are not offering finance or prominently featuring a finance program…you’re not alone. Most of your competition doesn’t either, but this represents an enormous opportunity to differentiate yourself and grow your sales.

If you are staying away from financing or not prominently featuring an existing finance program, opportunity for growth is lost. If a car dealer didn’t offer financing, how many cars would they sell versus the ones that do? At SLS, we help manufacturers, dealers and vendors with finance programs that grow sales and make things downright uncomplicated. If you would like to discuss how to capitalize on every sales opportunity contact us today.

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Is there more to “application only” than the application?

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“Just fill in the simple form and in anywhere from an hour to a day we’ll hand you $150,000 for commercial equipment.” The increasingly technology-driven world of small business credit decisions is a wonderful thing. Right?

Well, it can be. It can also be riddled with problems. As you look to “application only” lending for your commercial equipment, here are some important items to consider:

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The benefits of pre-qualification for your equipment financing.

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Many small business owners spend significant time going back and forth with equipment specs and spend virtually no time preparing the financing. Unfortunately, knowing how and where to get the money should be a first step and not an afterthought. The lack of up-front preparation for the finance process can lead to frustration on both ends of a transaction and a difficult experience. There is a simple solution that can better position you for success.

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4 old attitudes that are hurting your equipment sales.

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“We leave the financing to the customer”

  • Nearly 6 out of 10 business owners secure their financing at the dealer
  • Business owners are 3 times more likely to buy from a dealer that offers a finance program over one that doesn’t.

“My customer would rather get financing from their bank”

  • 64% of business owners prefer to finance equipment with an equipment lender versus their bank.
  • Banks fund dealers an average of 23.3 days later than equipment specific lenders.

“We never lead with a payment.”

  • 6% of commercial equipment sales teams lead with a payment
  • 69% of business owners value payment over purchase price

“Equipment Specs and Brand are more important than price.”

  • 63% of equipment sales teams believe asset specifications and brand are the most powerful points in the decision to buy commercial equipment.
  • 11% of business owners believe asset specifications and brand are the most powerful points in the decision to buy commercial equipment.
  • 84% of business owners look to price/payment as more important that asset specification and brand

Don’t let old attitudes about finance hold you back. At SLS, we keep equipment lending downright uncomplicated. Let’s talk.

 [source: 2015 Sawbux-Greenwich Study of Commercial Finance Decision Making]

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The benefits of finance pre-qualification in equipment sales.

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How many times do small business owners spend significant time going back and forth with equipment specs, only to find out they’ve spent virtually no time preparing the financing? Unfortunately, this is all too common for manufacturers, dealers and vendors. The lack of up-front preparation for the finance process can lead to frustration on both ends of a transaction and a difficult experience. There is a simple solution that can better position your sales team for success.

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Talk about money…sell more equipment.

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Have you ever noticed salespeople that are strong equipment experts are often not your star performers? Why? It could be work ethic, drive, the love of the hunt, the ability to connect with people. Or, it could be that they don’t talk about the money until it’s too late.

If you can’t pay for it, they can’t buy it. Yet, too many equipment salespeople spend time sharing their brilliance of the technical details of the assets when the customer is simply not in a position to buy financially.

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