Who Could Benefit from In-House Lease-to-Own Financing Programs?

In-house financing and lease-to-own (LTO) programs are powerful tools that can transform how consumers manage purchases and how businesses control their success. In-house financing will increase profitability for your store by adding another
revenue stream to your pocket, approving more customers for financing, increasing your closing ratio, and owning the customer relationship for repeat business. 

Here at Business Warrior, we understand the diverse benefits these programs bring businesses. This time on the blog, let’s explore who can benefit most from in-house financing and lease-to-own programs and how these options can enhance financial flexibility and accessibility.

In-House Financing and Lease-to-Own Programs

In-House Financing

In-house financing refers to a scenario where a business offers its own financing options to customers, bypassing traditional banks or third-party lenders.‍

The most important thing to know is that businesses offering in-house financing do not need to lend any cash in order to launch lease-to-own financing. That’s right, they don't risk any cash at all. The only risk is the internal cost of the item being leased. This makes the downside risk very small and enables businesses to make much more money then companies that offering financing for them. Those companies actually have to put up the cash for the item in the first place.

This approach allows businesses to control the lending terms, interest rates, and repayment schedules. In-house financing can be tailored to meet the business's and its customer’s unique needs, providing a seamless and integrated purchasing experience. This is huge. We’ll get to more benefits of this later.

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Lease-to-Own Programs

Lease-to-own programs allow customers to lease a product with the option to purchase it at the end of the lease term. This model is particularly attractive to those who may not have the upfront cash for the full purchase or prefer spreading the cost over time. Lease-to-own agreements provide flexibility and the opportunity to own the product after making a series of manageable payments.

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Who Can Benefit from These Programs?

Small and Medium-Sized Businesses (SMEs)

Small and medium-sized businesses can benefit from offering in-house financing and lease-to-own programs. These options can attract more customers by making their products and services more accessible. For instance, a small business selling high-end electronics or furniture can use in-house financing to offer customers affordable payment plans, increasing sales and customer loyalty. Perhaps most importantly, offering in-house financing generates a new revenue stream for the business. In-house financing puts businesses entirely in control over their terms and who they approve – allowing you to keep the revenue generated from interest and fees rather than handing off that hard-earned money to a third party

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Consumers with Limited Access to Traditional Financing

Many consumers face barriers when accessing traditional financing due to poor credit history or lack of credit. In-house financing and lease-to-own programs can provide these consumers with alternative pathways to purchase the products they need. By offering flexible terms and considering alternative data for credit assessment, businesses can cater to a broader customer base.

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Lease-to-own programs, in particular, can help consumers with limited upfront cash. These programs allow them to enjoy the benefits of a product immediately while paying for it over time. This approach can be especially beneficial for essential items like appliances, electronics, or vehicles, which are often necessary but expensive.

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Retailers and E-Commerce Businesses

Retailers and e-commerce businesses can leverage in-house financing and lease-to-own programs to boost sales and customer satisfaction. These financing options can enhance the shopping experience by providing customers with more payment choices. For example, an online retailer selling high-ticket items like electronics, furniture, or jewelry can offer in-house financing to reduce the financial burden on customers and increase conversion rates.

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By integrating lease-to-own options, retailers can also appeal to customers looking for flexible payment plans. This can reduce cart abandonment rates and increase overall sales. Additionally, offering these programs can differentiate a business from competitors, creating a unique selling proposition that attracts more customers.

Retailers Such As

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• Furniture Store
• Appliance Stores
• Jewelry Shops
• Electronics Retailers
• Home Improvement Stores
• Automotive Parts & Accessories
• Luxury Goods Retailers
• Fashion Retailers
• Sporting Goods Stores
• Online Marketplaces
• Mattress Stores

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Auto Dealerships

Auto dealerships can benefit immensely from offering in-house financing and lease-to-own programs. Many customers seeking to purchase a vehicle may struggle to secure traditional financing due to credit issues or financial instability. By providing in-house financing, dealerships can control the financing terms and offer more personalized solutions to their customers.

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Lease-to-own programs are also popular in the automotive industry. These programs allow customers to lease a vehicle with the option to buy it at the end of the lease term. This flexibility can attract a wider range of customers, including those who may not qualify for conventional auto loans. Additionally, lease-to-own programs can help dealerships move inventory faster and increase customer satisfaction by offering more flexible ownership options.

What In-House Financing Really Gives Businesses

Alright, so you understand who can benefit from offering an in-house financing or lease to own option, but it’s more than just being abel to sell more products to more customers.  That’s great. But in-house financing is the key here. There are plenty of third-party financers out there who are more than happy to manage financing on behalf of their small business customers, after all, they get to charge interest, set payments, and collect all that profit.

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By bringing financing in-house, businesses not only sell more product, they acquire the interest and premiums associated with the financing. Instead of selling a mattress for $500 and a third party financier like Snap getting an additional $300, the mattress retailers gets the full $800 and also get another stream of revenue, another dial they can adjust as they wish to control their flow of cash and control their business.

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• New Revenue Stream
• More Customers
• Increase Closing Ratio
• Repeat Business
• Higher Profit Margins
• Competitive Advantage

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PayPlan is a complete solution with everything you need to deploy a total, comprehensive lending solution in just 30 Days! Our expert team will help build the foundation, then you take it (and all the profits) from there!

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‍Book A Demo Of Payplan And See What It Can Do For Your Business!

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