This is a great system that is perfect for small businesses. Personally, I have seen this program generate between 25% and 40% increase in sales just by telling people that you offer “No Credit Check Financing”. This article will show you step by step how to set it up and many ideas related to advertising the plan.
By implementing the concept discussed in this article, Customized Concepts does not inherit responsibility for the repayment of loans, legal issues, or anything that results from the use of this information.
The legal disclaimer is essential. We offer a “90 Day Financing Plan” that is guaranteed. We take care of the details and the risk. There is no risk to the merchant. This article builds on the idea. You can put a lot of things in place to make sure your loans pay off. This will be your responsibility. We will discuss them and let you know the pros and cons.
You will need a good file management system. If you have a business, this is not really a problem. I recommend that all paperwork be scanned into your system. This allows a quick recovery if there is a problem with the contract that the customer signs.
Below is an example that does not charge customer finance fees. This would rate your program as “Same as Cash Financing.” You are allowed to charge finance charges and application fees. This would create another source of income for your business, but you cannot advertise “Same as cash financing.”
The choice is up to you.
Yoshi walks into your store and wants to buy your product or service, but he doesn’t have the money and he has bad credit, he has no credit, or he just doesn’t want to take out a loan. The item costs $ 1000. Yoshi says that’s too much right now. It explains that it can offer you a “no credit check financing option.” It says “Great”. You and Yoshi agree on which payment schedule will fit your budget. You agree that $ 200, every two weeks, would be within your budget.
Then Yoshi will write you five post-dated checks in the amount of $ 200 each. Five checks for $ 200 equals the sale price of $ 1000. I know someone says it’s that legal. Yes. The law with post-dating checks is very vague.
The two main things that come into play are:
1. If the customer writes a post-dated check that he knows will not be valid on the later date. This is a form of fraud. The customer is wrong.
2. Cash the check before the date after the date. When you and the customer agree on the payment schedule, you agree to cash the check on the dates indicated in the contract. You’re wrong. You can be sued for incurred fines and many other things depending on your state.
It’s a good idea to keep checks postdated within 90 days of the sale date. This is safer for you and the customer.
The check should be kept in a safe place (in a safe). This will ensure that they do not fall into the wrong hands.
Next, you’ll need to tidy up the filing system. You will need a way to inform you when the checks need to be cashed. You can do it in two ways.
The first would be a basic folder arrangement. Create a folder for each week. Check the folders at the beginning of the week to find out which checks need to be cashed.
The second and probably the preferred one would be a basic program with Excel or some other spreadsheet program. This would require you to enter the information into your system, but it would save the time of configuring the file. You’ll set up the spreadsheet to organize payments by date. Check the spreadsheet every day to see which checks need to be cashed.
Here are a couple of things to protect against fraud and non-payment.
The following options are at your discretion. You can use one of them or all of them. The more you implement, the more protection you will have so that the client does not default on the loan.
These first three are, in my opinion, essential.
1 Get a copy of the customer ID
2 Get a copy of your most recent paycheck stub. You can go one step further and verify employment. You can call the employer or send a fax to the Human Resources Department. The easiest way is to call. They can’t give you much information over the phone, but they can tell you if the client works there and if there is anything that could affect their future employment.
3 Call the bank to verify that the account is current.
4 Check the checks. If you have a merchant account that can process checks, this can be straightforward. If you don’t have check verification, you can call your provider and check prices to set it up. If you don’t have check verification and don’t want to pay for the service, there are other options. They are not that reliable but they will work. Physically go to the bank where the check was issued and cash it. If there are no funds, they will tell you or charge and charge the customer an overdraft fee. DO NOT DO THIS WITH POST-DATED CHECKS. This should only be done with checks that are not postdated. You and the customer agreed that the checks would not be cashed until the check date.
5 Verify that clients verify writing history. This can be done in two different ways. Visit National Check Network.com (NCN). You can also do a search on Google or ASK.com for “How to check a customer’s check writing history.” These systems can vary in cost and quality. We use NCN. This option will let you know if they have bad checks pending, a history of bad check writing, or any past check fraud.
These are the basics, and if you want to tweak it to better suit your business, great.
We have a customizable contract on our website available for download. The form is a PDF. If you don’t have a PDF editor, you can go to PrimoPDF.com and convert the file to a .DOC file. This contract is free and we will not ask you to provide us with any information. This is a great tool that will save you some time. No need to design your own. This is the exact form we use.
We also offer “No Credit Check Financing” which eliminates risk and is very easy to use. We implement the above procedures and guarantee payment to the merchant. If the customer defaults, we will honor the payment and take steps to recover the money owed. The fees involved are typically less than what it would cost you if you set up check verification and check writing history verification. It’s guaranteed to save you time.
Advertise “No Credit Check Financing” everywhere. Here are some suggestions.
Get a sign / banner stating you have the program. We have a local company that will paint the letters. You can also ask your local sign maker for help. Window sconces, sconces for your car, magnets for your car, the list is endless.
Change the audio on hold to mention “No Credit Check Financing” and also voicemail recordings. Be sure to mention the plan when you answer the phone.
Include the program in everything your business uses for advertising.
* Yellowbook Ads
* Business letters
* You need it to be visible to as many people as possible.
Make a local radio commercial that says it now offers “No Credit Check Financing.” This is spectacular if you can afford the media.
I hope everyone reading this didn’t seem like a waste of time. If you can’t use the information in this article, give it to someone who can. If you wish, you can download an exact copy of this article and order here. We will not request any information. I will write more articles in the near future. The article will discuss the ways that small businesses can increase their sales with various techniques. Sign up for my newsletter if you want to receive an email when they are published.