What does “Consumer Financing” mean?
The term ‘Consumer Financing’ is when a business or retailer offers customer financing options to its customers using either their own funds or the funds of a lending company or bank. This allows the consumer to be able to purchase an item that they would otherwise not be able to, or may not want to pay for using immediate funds. The term is typically used to describe debt for everyday goods and services.
Additional points:
- ‘Consumer financing’ covers all point of sale finance, including credit cards and installment loans.
- Businesses of all sizes benefit greatly from offering consumer financing.
- Also referred to as ‘Customer financing’
Why should I offer consumer financing?
For a retailer, offering consumer financing at the point of purchase can be crucial in converting passive browsers into active buyers. Therefore it can boost sales and conversion rates. At the same time, it can promote customer loyalty and repeat business. Consumer financing encourages a customer to increase their order spend, allowing them the opportunity to spend more than they would be able to if they had to pay the balance upfront.
Key benefits:
- Boosts sales and conversion rates
- Promotes customer loyalty and repeat business
- Increases average spend
See also Customer financing.
