How are US businesses helping their customers? In these challenging times, more and more businesses are finding ways to help customers get past their bad credit scores.
Do you have a small business? Whether you’re in real estate, retail, or a service provider, you may be wondering how to help your customers afford your products and services.
Here are the top tips to help your company grow—and help your customers get past a poor credit score.
Offer In-House Credit Cards
Many retailers offer in-house credit cards or credit accounts. These allow customers to get the purchases they need and pay their bills over time.
If you are in business and want to be the go-to location in your area, this can be a great way to build loyal customers. Customers with poor credit may choose to continue buying with you, at first because it’s possible, and later because you helped them get started.
Buy Now, Pay Later
Buy now, pay later is becoming an increasingly popular solution for merchants.
As a business owner, you can encourage customers to purchase with a variety of installment payment plans. These can be funded by your bank or through credit lines. This type of payment offer can help customers make a purchase, and repay over time.
In addition to retailers, many service providers offer similar solutions. A plumber, mechanic, or dentist can offer services and allow customers to pay their bills over time.
It’s important to evaluate the overall benefits and long-term impact of installment plans. As a merchant or service provider, you are offering convenience to customers. Yet, be alert. This can lead to problems if people are unable to pay, miss payments, or do not have the budget to pay.
Offer Interest-Free Payments
Take a lead from PayPal with ‘PayPal’s Pay in 4.’ This popular service allows customers to split purchases into four interest-free payments. The purchase price ranges from $30 to $600, and late fees may apply for missed payments. This may be a useful alternative to offer to your clients and customers to help offset the pain of paying in full at the time of purchase.
Offer Trade Lines
If you’re working with a new entrepreneur, they may be starting without an established business credit. However, as a small business owner yourself, you can extend a tradeline to help your customers. It’s important to monitor these accounts so that the terms are cost-effective and functional.
Extend Trade Credit
Many small business owners find that it’s good ‘karma’ to extend trade credit to new and existing customers. After all, if you are a solo entrepreneur, you may know how much this meant to you when you were starting.
Explore different ways to have the trade credit work for you and your customer. If you have a good relationship with a client, you may be able to extend credit that allows them to pay several days or weeks after they receive an item. These may be terms such as NET 30, or NET 10.
One of the ways to work with new customers is to start with shorter trade credit, such as 10 days to pay. If the client consistently pays on time or early, you can extend the credit to NET 30.
Provide a List of Resources
Your clients and customers may not be aware of many of the options available to them outside of what you can provide. For example, some companies out there provide emergency loans for bad credit. If you can provide your customers with a list of their options, they may be able to find ways to afford the products you offer.
This is a great way to help customers who may struggle with bad credit scores. You can reduce the stress by offering current information, details, and possibly even ease of application. This works for your customer, and it helps you, as the business owner, to build rapport, trust—and increase your bottom line.
Create Lay-Away Options
Similar to installment purchases, you can go old-school and offer layaway options. This is a classic pay-over-time option. The only difference is that the business keeps the item until the payment is. made in full.
Consider what will work best for your business and your customers. By helping your customers get past their bad credit scores, you can build loyal followers and a prosperous business.
