The economic climate has been tough on everyone. It’s easier than ever to get caught up in the cycle of living paycheck to paycheck and struggling with debt. But there are ways to grow your contractor business, even when money is tight. Financing is one of the best options for expanding your business. There are many financing options available for contractors. You can use your credit cards and loans, but like all debt, these have high-interest rates that will leave you in financial trouble if used incorrectly.
Consumer financing can help you grow a contractor business by providing the capital you need for new equipment or a marketing campaign that will increase customer awareness of what you do. I want to talk about how these loans work and how they can be an invaluable asset for contractors who want to keep their company growing during these tough times.
How does Consumer Financing Work?
Consumer financing helps customers and business owners to purchase items they need or want. If you don’t qualify for a loan from the bank due to your low credit score, it doesn’t mean you can’t get help with growing your contractor business by using consumer financing instead of going into debt on high-interest rates loans.
It allows the customer to make regular payments over a specific duration, usually one to five years. The customer has access to the items they need now and can pay for them gradually without being overwhelmed with debt.
Consumer financing is available from any number of sources, like banks, retailers, credit unions, or even online companies that have set up their lending agencies. Some consumer financing companies also provide financing for maintaining health, like ophthalmology financing, dental financing, and veterinary financing.
Why is Consumer Financing Better Than Traditional Bank Loans?
Traditional bank loans do not offer the same flexibility and customer service that consumer financing offers. The payments are often calculated monthly, which is difficult for many contractors because they only receive payment after every job has been completed.
Consumer financing also carries lower interest rates than traditional bank loans and doesn’t require good credit scores to qualify as well as no collateral requirement like traditional bank loans have.
How Consumer Financing Can Help You Grow Your Contractor Business?
You can grow your business faster by taking advantage of these financing options. If you have a good credit score, cash flow is high and there is no competition in the market for those loans, then it’s a great idea to explore this option.
Provide Capital For Buying New Equipment
Old machinery often consumes a lot of time and energy that could be spent on more profitable tasks. Replacing them with a new one can save a lot of money in the long run. Consumer financing company provides you sufficient cash flow to buy new equipment or upgrade your old one. New equipment not only saves time and energy but also works more efficiently without high-maintenance cost.
Expand Your Inventory Or Service Offerings
If you have a successful business in one location and want to expand it with more locations, then a financing company can help grow the business rapidly through these loans without any difficulty. It is a great way for contractor businesses to expand their inventory or service offerings without having to pay out-of-pocket upfront costs.
It’s also worth considering that some businesses are not eligible for commercial loans made available by banks due to their size so this is an excellent option if you don’t qualify for them.
Start with Social Media
It’s important to start by using social media in your strategy as it has been shown that over half of all U.S. adults use Facebook monthly while 43% visit Twitter each month according to Pew Research Center. This lets you grow your customer base without spending any money on advertising or promotions because people will be seeing what you’re doing through these platforms whether they like it or not.
Upgrade Your Marketing Tactics
Marketing tactics are a major part of every business, and when you are trying to grow your contractor business, it is critical that the marketing tactics used by your company fit within the budget. Both traditional, as well as digital marketing, require a considerable amount of capital to advertise.
This can be a challenge for many contractors because they may have made investments in something else. Consumer financing provides you extra funds that you can spend on improving your marketing tactics. By improving marketing you can boost sales and grow your business.
Hiring More Workforce
Every business needs an adequate workforce, but this can be expensive for a contractor at the start of their journey. More workforce can do the job and grow the business. But contractors may not have enough money to hire more employees and even if they do, it’s unlikely that they will be able to afford those extra people long term without funding from outside sources.
This is where consumer financing for contractors comes into play. You may need a little extra cash to hire someone while waiting on your next project or two-to have an adequate workforce each day so that sales don’t suffer as much when one or both jobs are not available.
Hiring Consulting Services
Consulting services are commonly needed for contractor businesses to make sure they can grow and will be able to withstand the uncertainty of the construction industry.
It’s not always easy to get consulting help on your own, which is why consumer financing might come in handy when it comes time for contractors to hire outside professionals that specialize in business development. Contractors may need this kind of assistance if they want their company to succeed long-term, but don’t have enough capital themselves or credit scores high enough to qualify as an attractive client.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.