When it comes to offering financing to buyers, vendors who offer financing at all stick with just one lending partner, or maybe two or three at best. At first glance, it may seem simpler for you to manage fewer lender relationships, but what often gets overlooked is how this approach puts a hard limit on your buyers’ options, and ultimately, your sales.
The Financing Landscape
Lenders don’t fit neatly into just one or two categories. In reality, the lending world is far more diverse, with different lenders catering to a wide range of buyer profiles, risk levels, equipment industries and financing needs.
Here’s a look at the various types of lenders you might encounter:
Prime Lenders:
These lenders focus on customers with excellent credit and strong financial histories. They typically offer the most competitive interest rates and favorable terms but have strict approval criteria that exclude many buyers.
Near-Prime Lenders:
Target buyers who fall just short of prime credit, these lenders approve applicants with slightly lower credit scores or limited credit history. Their rates are generally higher than prime lenders but remain attractive.
Alternative and Specialty Lenders:
These lenders are willing to work with non-traditional borrowers, such as startups, businesses with limited credit, or moderate risk profiles. These types of lenders expand financing opportunities but often charge slightly higher rates to offset increased risk.
Instant or Automated Approval Lenders:
These lenders use technology-driven automated decision-making to provide rapid approvals, often within minutes. While convenient, they sometimes charge higher rates or fees to balance the risk of quick underwriting, which might not satisfy prime buyers seeking the best terms.
High-Risk Lenders:
Designed for customers with poor credit or unique financial situations, these lenders approve borrowers that others will not, but at significantly higher rates and less flexible terms.
This variety is why relying on just one or two lending partners limits your ability to serve the full spectrum of buyers. Your customers are unique, with different credit profiles and financing needs, and if you want to maximize buyer satisfaction and completed sales, the lending options you offer them should account for that diversity.
A Tale of Two Buyers
Consider Joe, who owns a construction business and has been operating for 20 years with excellent credit. Joe needs a new piece of equipment and applies through ABC Equipment Company. That same day, Larry, who is just starting his own business, applies for the same equipment.
ABC Equipment Company only partners with one near-prime lender. That lender approves Joe but offers a rate he is not thrilled with. Larry, however, is declined because the lender does not finance new businesses. Both Joe and Larry end up buying elsewhere, which means lost sales due to limited financing options.
Your Buyers Deserve Better Options
Your buyers are not all the same, so why should their lending options be? Whether you are selling equipment to startups, established businesses, or buyers with varying credit profiles, your financing options should reflect that diversity.
APPROVE connects buyers with a wide range of lenders and matches each customer with options that suit their unique situation, all through one straightforward application.
How Financing Options Are Often Presented — And Why That’s a Problem
Before using APPROVE, many of our vendor partners understood that each customer is different, so they had a list of lenders that they would hand to customers. The customers then had to contact each lending company individually, with no way to know if a lender was a good fit. This often leads to customers filling out multiple applications and engaging in inconvenient, ongoing back-and-forth interactions with multiple lending companies. But even if approved, many buyers still had no idea whether they were getting competitive rates and terms, so they would have to start the application process from scratch again and again with different lenders to try and find better terms.
This reapplication process not only slows down deals but also creates a frustrating experience for customers, who end up buried in paperwork and uncertainty.
One APPROVE client, Pizza Solutions, explained it this way:
“One finance company doesn’t work for everybody, so there were a lot of folks slipping through the cracks — whether it was due to low credit, being a startup, or not meeting minimum loan amounts. We had a list of finance companies and contacts, and if a customer couldn’t get financing on their own and needed other options, we’d literally send them that list of lenders and say, ‘Here you are, good luck!’ I know people slipped through the cracks and ended up walking away because they couldn’t get financing.”
The Power of APPROVE’s Network in Action
Here’s an actual example that reveals how APPROVE’s lender network can help diverse buyers get the equipment they need, all through one streamlined process.
Franchisees of a coffee company with over 10 locations were each required to purchase a new model of commercial coffee equipment, and they all applied through APPROVE’s quick and easy application. Since these franchisees all operated under the same parent company, you might expect their financing needs to be similar. But when they applied, their credit profiles varied widely.
It took not one, two, or three lenders, but six different lenders to secure approvals for all the franchisees. In one extreme case, a credit-challenged franchisee received five declines before finally getting approved. Thanks to the power of APPROVE’s network, every franchisee secured financing options that worked for them, all through a single application.
What Sets APPROVE Apart from Traditional Brokers?
You might be wondering, “What about brokers? Aren’t they supposed to help buyers find financing options?”
Traditional brokers often work with a few lenders and may present a single “best” option, sometimes the one that benefits themselves more than the buyer.
APPROVE is different. We are a digital broker leveraging technology to show your customers all available financing options across a broad lender network.
Plus, our in-house finance experts review the approval options with your customers, helping them understand and choose the best terms for their business, not just the quickest or easiest deal.
This unbiased, tech-forward approach means smarter financing decisions, faster approvals, and happier customers.
The Future of Equipment Financing Is Here
Financing should not be complicated or frustrating for customers. It should be:
If you want to unlock more sales by giving your buyers the best chance at approval and competitive rates, it is time to harness the power of APPROVE’s lender network.