How to Offer Fast Financing for SMBs with Low or New Credit

At least 40% of your customer base is slipping through the cracks. They’re bouncing off your site, abandoning their online shopping carts, or leaving your showroom empty-handed. These would-be customers think there’s no way they can afford the equipment you’re selling—the equipment they need to get their businesses off the ground and thriving. But the reality is they can afford your products. All they need is a path through the roadblocks in their way.

Here’s how to identify that missing 40% of your customer base, take them all the way through the financing process, and close more sales fast and efficiently.

The 3 Reasons 40% of SMBs Struggle to Find Equipment Financing

Traditional B2B lenders, credit cards, promo financing—each of these financing options come with prohibitive requirements and practical drawbacks for a huge portion of your customer base. Professional consumers, or pro-sumers, such as SMBs with bad or new credit, startups, and mom-and-pop shops have dreams as real as any business owner with the advantage of capital under their belt. Still, their financing options are limited for three reasons: their credit profile, the amount of funding needed, and their time in business.

Here’s what our special-case pro-sumers are up against:

  1. Traditional lenders don’t approve startup business or working capital loans when the applicant’s FICO score is less than 680, and at least 68% of pro-sumers fall short of this baseline score. Many SMBs with this credit profile don’t apply for loans from traditional lenders. They’re often denied outright or sent on a goose chase for documents, drawing out the process for days without any promise of approval at the end.
  2. Issuing loans for less than $15K is a no-go for traditional B2B lenders. The underwriting expense alone is too much hassle for such little return. But the SMBs who make up your untapped demographic are seeking an average transaction amount of $7,000.
  3. Most lenders look at time in business (TIB) to determine an applicant’s viability when approving or denying financing. This puts startups at a disadvantage when pursuing a traditional business loan, but it also uniquely positions them to seek alternative purchasing options.

According to our research, 6 out of every 10 businesses make an equipment purchase using traditional lending, a credit card, or promo financing, while the remaining 4 companies match the above profile. This missing 40% is unable to procure crucial equipment for their business because of credit card limits, low FICO scores, inadequate TIB, and finally, the simple inability to pay the full cost of equipment upfront.

Provide an alternative purchase option to your customers at checkout and connect your products to 40% more of your base. In other words, nearly half of your potential customers bounce off your site or leave your store to search elsewhere because you don’t have a purchase option available to them.

Find the Customer Hiding in Plain Sight, then Sell to Them

Opportunities to generate leads, move equipment, and increase sales are hiding in plain sight, just like the underserved microticket market you previously didn’t know were shopping with you.

Equipment financing solutions like clicklease topple the roadblocks built into traditional B2B lending by giving you and your customer base access to a no-fee, incremental B2B purchasing option. With clicklease, our proprietary underwriting algorithm nixes TIB requirements and grants instant approvals for credit-challenged SMBs and startups. The vendor receives the equipment’s full value upfront while the payment is broken into three bite-size pieces for the pro-sumer.

No more price negotiations and discounts to make the sale. No more chasing documents. And no more credit card fees. Both vendor and customer benefit from a point-of-sale purchase experience where the vendor receives 100% of the sale price, and the customer is given the option to purchase needed equipment at a pace they can afford.

Close the Sale and Grow Together

The clicklease payment platform is an alternative to traditional B2B lending because it serves every credit profile and doesn’t affect the customer’s debt to income ratio. With clicklease, customers choose their own payment plan while gaining immediate access to needed equipment. They’re able to complete the purchase through manageable monthly payments while growing their business. You’re able to move products and make sales.

Other notable advantages to clicklease’s B2B payment platform include:

    • Instant approvals using clicklease take seconds instead of days.
    • As a true option for the microticket market, clicklease targets the $500 to $15,000 transaction range.
    • We’re passionate about assisting startups. Of all the applications clicklease has funded, at least 50% have less than 3 years TIB.

Nothing makes us prouder than facilitating fruitful B2B partnerships. By funding what others won’t, clicklease successfully opens up your business to 90% of your customer base, assures new channels of revenue, and helps an unserved pocket of SMBs get off the ground and flourish using your products.