Retail finance has been around for some time, the proliferation of 0% , and Buy Now Pay Later (BNPL) and Interest Bearing schemes have helped many a company to make their products more affordable to the general public.
A Retail finance facility, essentially is what is termed a DCS facility, DCS stands for Debtor Credit Supply, what this means is that if your client comes into your shop and buys something on your credit facility, then you, the dealer, gets paid direct. This has some obvious advantages, in that, it would not be unknown for a client to take out a secured loan or personal loan and then find something else they would rather spend the money on.
Credit Facilities, come in various guises, as mentioned, Interest Bearing, which is the standard product and basically means a standard credit agreement which has a fixed rate of interest over a certain period , eg 19.9% APR over 36 months.
Alternatives are 0% finance, or interest free, this is where the client is given a rate of 0% APR, but the dealer would have to subsidise this, so in the end someone is paying the interest. Another option is Buy Now Pay Later, or deferred payment, this is where an agreement is taken out on day 1, however payments are deferred, for a number of months. This also carries a subsidy, which is payable by the dealer. With some BNPL packages, if the client pays the outstanding balance, in full, then they may not pay any interest, however, if the client does not pay the full amount, typically at the end of such an agreement there is a 29.9%APR that the client goes into at the end of the BNPL period.
Of all the available retail Credit facilities, your ability to obtain one is dependant upon your business, some lenders require 2 years accounts, some don't, some will require a turnover of x amount.
A retail credit facility can and will boost your turnover and profitability, should it be used correctly, some large retail companies depend on retail finance for a sizeable amount of there turnover. If anything it widens your net of available customers, because your product can be made more affordable.
