Customer financing: A guide for small businesses with an Intuit solution

By offering customer financing, you can help customers pay for products, goods, or services over time. This approach can be a win-win, making high-ticket items more accessible for your customers while increasing sales and revenue for your business.

What is customer financing? Customer financing is a program that allows you to offer your customers the option to pay for purchases over a period of time, such as six weeks or 24 months, instead of all at once. For a small business owner, this can be a key to success, as it helps break down the initial upfront cost barrier.

Why is it important to offer customer financing? Offering financing makes your products and services more accessible, expanding your potential customer base. If a customer can't afford a large upfront payment, a financing option can make a purchase affordable through smaller, fixed monthly payment plans. This can help you secure sales that you might have otherwise lost. It also allows customers to choose more comprehensive or higher-priced service packages, which can boost your average order value.

Types of customer financing

There are two primary ways to offer financing to your customers:

• In-house financing: This is when you, as the business owner, act as the creditor. You are responsible for managing the application process, credit checks, and collecting payments. This gives you full control but can add significant administrative complexity.
• Third-party financing: You partner with an external provider who acts as the lender. The provider handles the credit checks and payment collection, which can free up your time and reduce administrative overhead.

One of the major benefits of a third-party solution is the reduction of administrative complexity. For example, some platforms, like Intuit's Customer Financing product, can be easily integrated with your existing processes, allowing you to offer this option to your customers at no additional cost to your business.

How Intuit's customer financing works

Intuit has partnered with Credit Karma to offer flexible financing options to your customers. The Intuit Credit Karma marketplace brings together multiple lenders to provide personalized financing offers. This service is for individual consumers, and while we're working to add business financing in the future, it is not currently available. This option is enabled by default for companies using QuickBooks Online for estimates over $1,000.

Here’s a breakdown of the simple process:

1. Offer presentation: When you send an estimate over $1,000 via QuickBooks, and your customer will automatically see a financing option. This is the best time to introduce the payment option.
2. Customer experience: Customers can explore personalized financing options from multiple lenders in the Credit Karma marketplace. A soft credit inquiry confirms the advertised terms without affecting their credit score. If they choose to proceed, the lender will perform a hard inquiry, which may impact their credit score.
3. Simple application: The application is streamlined and often takes as few as 10 minutes.
4. Fast funding: If approved, customers can receive the funds in as few as 1 to 7 days. They can then use these funds to pay you for the service.
5. Fixed payments: The customer repays the lender directly in regular monthly payments. Customers can choose loan terms from 24 to 72 months and won't be charged a prepayment fee if they decide to pay the loan off early.

For a visual demonstration of how the process works for your customers, watch the demo video on the QuickBooks Customer Financing merchant hub.

Benefits for your business and customers

Offering this financing option with Intuit is a powerful tool for your business and a great benefit for your customers.

For your business, it's a powerful tool to:

• Close more sales: Financing breaks down the upfront cost barrier, making it easier for customers to say yes to a project. This can help you turn more estimates into jobs.
• Increase project size: Customers may be more willing to choose a larger or more comprehensive service package when they can pay over time, increasing your average order value.
• No cost to you: Offering customer financing is available at no additional cost to your business when you use QuickBooks customer financing options. You can explore how it works for your business and your customers by visiting the QuickBooks Customer Financing merchant hub.

For your customers, it provides:

• Affordable payments: Spreading the cost of a project over time makes it more manageable for their budget with fixed monthly payments.
• Personalized offers: Customers get a variety of personalized financing offers from a marketplace of lenders, giving them options to compare.
• Financial flexibility: It gives customers the option to finance a purchase without using their existing cash on hand.

How to promote financing to your customers

To get the most out of Intuit's Customer Financing product, consider these strategies:

• Introduce the option early: The best time to mention financing is when you’re providing the initial estimate. You can tell potential customers you've partnered with Intuit Credit Karma to offer a "pay over time" option.
• Incorporate messaging: Include "pay over time" messaging in all aspects of your quoting process, from conversations to estimates to follow-ups. This repetition ensures customers are aware of the option.
• Familiarize your team: Make sure you and your team are knowledgeable about how the financing works so you can confidently answer customer questions about the process. You can learn more about how it works and share your customized financing link with customers on the QuickBooks Customer Financing merchant hub. You can also find the recording of the customer financing webinar if you would like a more in-depth look.