Published October 3, 2013 | Updated September 16, 2021

One of the best ways to sell more equipment is to make it as easy as possible for the buyer to pay for it. Though many buyers face a challenging time for cash flow and budgets, they still need equipment to pursue opportunities, and price becomes much less of an issue for them if payment terms are offered. This is particularly true when the transaction doesn’t require a large upfront cash outlay. But whether times are difficult, favorable, or somewhere in between, creative financing is one of the most powerful closing tools a salesperson can deploy, while at the same time adding significant value for the customer who takes advantage of it.

So, what is creative financing? Creative financing starts with a finance partner that understands your business and the challenges your salesforce faces every day. The ability to develop a creative finance program that meets your needs and helps you to close more sales requires a broad and deep understanding of what you are selling and whom you are selling it to.

A properly configured program of creative financing becomes much more than a simple form of payment. Successful equipment dealers use creative financing as a powerful revenue-generation strategy that can be used to attract new buyers and close them. An experienced salesperson often uses creative financing as the ultimate sales closing tool.

However, this is not to say that creative financing is a replacement for a thorough and meticulous evaluation and understanding of a buyer’s needs. Knowing what problems a buyer is trying to solve is the first step in any effective – and successful – sales process. And the more the salesperson knows about what the buyer is trying to accomplish, the larger the ultimate sale tends to be.

Once the equipment solution has been developed and proposed, introducing finance options does two things. First, it shifts the discussion away from the total price to a much lower monthly payment number. This number can then be modified to reach a monthly payment amount that fits the buyer’s budget.

But creative financing is not simply about creating an affordable monthly payment. For example, different customers have different requirements for their equipment at the end of the financing term. Some want to own it and keep using it. Some want to return it and get new equipment. A creative financing solution can be tailored to meet virtually any end-of-term requirement.

The second major benefit of using creative financing as a closing tool is that it makes adding additional products, software, and services a lot easier. After a buyer says “yes” the first time, they become increasingly likely to say it again, provided that the salesperson is solving problems and providing value. Also, because add-on products and services can easily be incorporated into a creative finance package, the overall impact on the transaction is minimal.

Working with the finance company, an equipment dealer can offer a wide range of programs that wrap all the necessary supplies and services required over the lifetime of the solution into one convenient monthly payment. So, instead of inflating the total price tag to a point where it becomes unaffordable, the additional products and services only cause small incremental increases to the proposed monthly payment over time.

Creative financing can also be used to encourage sales of a particular product or an entire line, for that matter. Working closely with the finance company, the equipment dealer develops a promotion that creates excitement with customers and adds urgency in the form of a limited time offer. As an example, a low-interest rate could be offered for a slow-moving product, or a deferred payment promotion could be offered to customers in a seasonal industry.

Virtually the only thing required for these kinds of promotions is a close working relationship between the dealer and its financing company partner. Some progressive and experienced finance companies have become quite good at helping their dealer partners market and promote their businesses effectively and profitably. This kind of working partnership can be exceptionally valuable to equipment dealers that are battling for market share in hyper-competitive marketplaces.

When used properly, creative financing is one of the most powerful business developments and closing tools available to an equipment dealer. It makes it easier for your buyers to buy, and sales will be easier, too.