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Your views on finance for signs please?

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Post Sun Feb 18, 2018 10:48 pm

Your views on finance for signs please?

Hi folks,

Had an idea to offer finance on bigger sign projects. I see a few wrap shops do this. We supply our customers 3 different price options normally, quite often they will go with the cheapest. Seems to come down to budget. I can understand that, opening a new outfit the last thing people want to do is spend thousands on a sign etc..

Is there a finance company others have used/can used/heard of. Am sure there’s a lot of red tape and we will loose a fraction on the job, but worth taking a look anyway and offering to customers where suitable.
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Post Mon Feb 19, 2018 11:16 am

Re: Your views on finance for signs please?

Unless you were doing it with your own cash, I doubt there will be many companies willing to take this on.

If they're starting up, a sign is almost certainly required, and should have been budgeted for.

If they're sole traders, you'd possibly require a consumer credit licence.

If the customer fails to make payments, what are the finance company going to use to recover their costs?

The sign's of no value to anyone but the customer.
They may not own any property or any assets.
They may have taken out loans to fund the venture.

My personal opinion, it sounds a little high risk. In the current market I'd be inclined to get paid sooner, not later.

There's invoice finance... you get paid x% of the invoice when it's raised, the balance (less fee's) when the customer pays. Some factoring companies will take their money back if the customer doesn't pay.
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Post Mon Feb 19, 2018 4:23 pm

Re: Your views on finance for signs please?

We contacted a fast food customer and asked why he went with another company ( not local to us) as we had done work for him before.

He said it was quite simple, they offered finance over 12 months. I wanted a deposit and the rest upon completion.

It was a full refit inside and outside. We quoted £4200 + VAT

Someone must have a healthy bank balance
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Post Mon Feb 19, 2018 5:06 pm

Re: Your views on finance for signs please?

Yea, I'm with David on this. This is no way I'd offer finance out to my customers.
Those who might order in the £thousands are of a size where 5k doesn't cause any concerns. Those that are likely to take up the finance offer would be those who are otherwise unable to pay for the sign there and then / within 30 days.
That means you'll be taking the risk of them going under in the next 12 months if you're financing it yourself. Through another company is just added paperwork imo.
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Post Tue Feb 20, 2018 1:06 am

Re: Your views on finance for signs please?

For me finance for customers = "put it on a credit card or get a bank loan", this is your problem not mine...

We'll do 50% deposit and 50% on completion on most stuff for vans and shop signs, and if a degree of historical trust is built up, maybe 30 days. First time orders, whether Mr Smith and a £10 order or a multinational ordering £thousands...all up front
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Post Tue Feb 20, 2018 7:50 am

Re: Your views on finance for signs please?

A quick google throws up a wrap company that offers finance using dividebuy or omni capital.

Regards

Alex
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Post Tue Feb 20, 2018 9:02 am

Re: Your views on finance for signs please?

Surely we all buy things we can’t afford in one go on credit? How many here bought a printer outright?

I’ve personally used omni when buying a new S/G. I put down £1000 the paid the remaining £1.5k interest free over 12months, I could pay early etc. If it made the difference between wasting hours on a £3k quote I’m unlikely to get, or getting the job, I don’t see why it would be so bad to offer it.

I can’t remember how many larger signs I’ve quoted for and not got due to cost - the ones where they then go elsewhere and buy foamex!! I’m at the point where I don’t want to waste the time anymore, could this make a difference??
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Post Tue Feb 20, 2018 9:58 am

Re: Your views on finance for signs please?

If it's as simple as their websites make out, it may be worth considering:

Customer applies
Customer get's an offer
Customer accepts
We get paid

Job done.

Defaulting on the payment is between the finance company and the customer, what's not to like.

What I can't find is what the costs are to the business, as it surely cannot be completely free?

Also will you need to register with the FCA as a credit broker?
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Post Tue Feb 20, 2018 11:59 am

Re: Your views on finance for signs please?

I’ll call today and find out and will report back. As hugh says you can get anything on finance these days, even window frames.
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Post Tue Feb 20, 2018 12:32 pm

Re: Your views on finance for signs please?

David Hammond wrote:If it's as simple as their websites make out, it may be worth considering:

Customer applies
Customer get's an offer
Customer accepts
We get paid

Job done.

Defaulting on the payment is between the finance company and the customer, what's not to like.

What I can't find is what the costs are to the business, as it surely cannot be completely free?

Also will you need to register with the FCA as a credit broker?


I can only speak with experience as a consumer of Omni, I sat in the office of the gun shop, went on their pc, filled out the relevant details on a secure website, milled around the shop for ten mins with a cuppa while they awaited the approval, 20mins later I toddled off home with a new SG.

The only thing I see here with this method, is making sure your pricing is 100% correct before they apply for the credit, no going back once the deal is done.

Questions I would ask is - how long until the customer payment comes to me? I don't wan't to be getting £3k jobs if I'm subbing £2k of signs for 90days, etc.
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Post Tue Feb 20, 2018 1:28 pm

Re: Your views on finance for signs please?

Their websites say there's a daily settlement.

I'd imagine that the more you use them, the better your rate becomes.

Invoice factoring companies can take their cash back if the customer doesn't pay.
Also worth considering what happens if the customer raises a dispute, as the finance company will undoubtedly get involved.
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Post Wed Feb 21, 2018 6:13 pm

Re: Your views on finance for signs please?

David Hammond wrote:Their websites say there's a daily settlement.

I'd imagine that the more you use them, the better your rate becomes.

Invoice factoring companies can take their cash back if the customer doesn't pay.
Also worth considering what happens if the customer raises a dispute, as the finance company will undoubtedly get involved.



I think the loan is a personal loan, and not secured against any asset. I dont think the finance company can pusue you for any non payers etc.

In general I think its a great idea, making your goods or services as affordable as possible for your customers. What a great way to sell a sign..... how does £100 a month sound?? ... interest free credit of course. If you cant close more deals for more money with that on your tool box you should be grilling burgers. ( not aimed at you David BTW )
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Post Wed Feb 21, 2018 6:23 pm

Re: Your views on finance for signs please?

I suppose it depends on the customer, if there are companies happy to lend cash out for signs I'm all for it.

I still think you'll need FCA approval, not sure on the costs associated.
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Post Wed Feb 21, 2018 7:01 pm

Re: Your views on finance for signs please?

As you can see from my other post my machine broke again so I’ve not had a chance to call and report back but I will
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Post Fri Feb 23, 2018 12:36 pm

Re: Your views on finance for signs please?

Ok so I’ve finally looked into this.

It does take a while to set-up. You need to be FCA registered which takes 3-6months and the fill out a quick data form and pay a fee for this.

From there you can offer your clients finance. However your basically just pointing your customer in direction of getting finance. Once approved the finance company will pay your customer and then it’s up to you payment term wise what you want to do.

Apart from the paper work your not responsible for client repayments, or anything. Just do the job as you normally would. No fees mention on our side so far apart from your sign up costs for data protection.

I’m going to go ahead. As if it secures us just one big client a year am sure that will offset any set-up cost. If we are doing 10 clients a week then am sure I will have the extra capital to employee more bodies to be able to cover the extra paper work time.
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Post Fri Feb 23, 2018 6:59 pm

Re: Your views on finance for signs please?

What is the setup cost and is it annually?
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Post Fri Feb 23, 2018 7:59 pm

Your views on finance for signs please?

Don’t know yet am afraid. Didn’t get that far today.

Just done a quick google. £35. Unless you have a turn over of 54 million or something ridiculous then it’s £500 ;) That could be wrong. I don’t know the fees for FCA. He didn’t say there was anything though either.

I would imagine it’s annually .

There is possibly more info on the FCA website
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Post Sat Feb 24, 2018 3:20 pm

Re: Your views on finance for signs please?

Hi all. First time poster but this thread is very interesting to me. I have researched this in detail as it's something we have been looking at for a number of years. There are plenty of finance companies willing to set up these deals. They take care of the whole process (so you don't need your own credit license, although it is probably a good idea to register).
The deal is financed on the customer, not the assets, and the minimum deal is normally £3000.00

The APR can be high but the general pitch for the salesman is 'a 3k deal will cost £27 a week'

The agreement is between the client and the finance company so any issues with payment are between them - and you are paid within 7 days of completion of job - so no cash flow issues.

So I agree that it is a brilliant tool in a salesmans box. As someone said before, if you can't sell that you shouldn't be selling!! Obviously once you have someone on the hook for a 3k deal you then up sell to 4-5k for an extra few pounds a week. What's not to like???

In fact we are currently looking for a salesperson to come in and concentrate on selling these deals specifically.

Anyone interested please contact me. I believe there's money to be made.
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Post Sat Feb 24, 2018 5:20 pm

Re: Your views on finance for signs please?

Another benefit I see is that the "better" job with quality materials etc etc is affordable for all ( who pass the credit check) I dont think you need to "gouge" the customer, just play fair. Thats the drawback with a specialist finance lead sales person, they can very quickly get very greedy. I dont think Ive seen Roger Cook feature a sign company, not yet anyway.
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Post Mon Feb 26, 2018 10:29 pm

Re: Your views on finance for signs please?

Some credit providers/brokers give you a commission as an added incentive. However, if the client faults in payments or whatever, they do claw-back the commission at any time. I have a couple of good mates that have car garages and i know they have had paybacks to give for their customers not completing payments.

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