B2B Customer Financing: 3 Big Reasons To Do It | Behalf

By January 14, 2017Business Financing
B2B customer financing: why your company should do it and how

B2B Customer Financing: Why Your Company Should Do It and How

All great business models are based upon give and take. Delivering a product or experience is fundamentally an exchange of value. No one understands this concept better than your company’s accounts receivable department. Day in and day out they track the cash that flows into and out of your company. They may also already be wise to the fact that giving your customers more options in how they pay makes them much more likely to pay you on time. Therefore, when you take the initiative to empower your customers with payment options, you also empower your business. Consider your customers’ payment terms for your company’s sake and learn more about the world of B2B customer financing.

With B2B customer financing, your company can tap into a broader universe of customers that would like to make business purchases but are hesitant because they aren’t sure they can afford it. Some of these customers are choosing your competitors because of the more flexible terms they are offering. Others are among your existing customer base and are regularly failing to complete purchases, abandoning shopping carts full of products when they realize they don’t have enough cash flow on hand to fulfill payment. Offering B2B customer financing will increase sales and improve customer satisfaction. The following article explains 3 reasons why your company should implement B2B customer financing now and exactly how to go about making the change.

Why You Should Provide B2B Customer Financing

1) Improve Customer Relations

B2B customer financing is an effective way to show customers that your company cares about their business needs. Large corporations often struggle to connect to their client base on a personal level. What better way to show you are your customers’ advocate than to increase their business purchasing power? B2B customer financing expands your client base to include those customer’s who may not have originally been able to afford your products or services. It allows all your customers to buy what they need today and pay for their purchase over time. Making your customers’ wallets more flexible increases the chance they will return to make more business purchases. As a result, your company will grow a larger, more loyal customer base.

2) Maximize Sales

B2B customer financing increases customers’ buying power. Apprehensive customers can commit to purchases with greater peace of mind, knowing they do not have to pay for their items right away. Not only does B2B customer financing increase the number of purchases, but also the size of the orders. These days credit cards and cash are not enough, as both leave small businesses hanging when it comes time to make a large purchase. It is not uncommon for a business to be put in a pinch when a large, unexpected purchase need reveals itself during a low cash flow season. Healthy small businesses experience occasional cash flow gaps throughout the year and often miss out on valuable growth opportunities during their cash flow dips. B2B customer financing allows customers to take advantage of deals and special offers they might not otherwise be able to, because of bad timing or slight dips in revenue.

3) Get Paid Faster without the Drama

When your customers struggle with payment, you struggle too. Collections, while critical to the success of your business, put strain on your valuable customer relationships. The worst time to pressure your customer to pay back is when they are experiencing a rough patch. However, that is exactly when their late payments will be putting a strain on your business. When you provide B2B customer financing, you alleviate this friction in your customer relationship while still accelerating your receivables. With B2B customer financing, you get paid quickly – possible even faster than your standard net terms – and your customer gets the flexibility to pay on whatever schedule they need. It’s a win/win.