Answers to your questions about the subprime market and its potential for your business
Traditional financing doesn’t work for everyone – and that can mean missed sales opportunities for your business. Learn answers to key questions about the subprime market and how Snap Finance helps retailers reach more customers and grow revenue.
Millions of shoppers are underserved by traditional credit. Subprime and credit-invisible consumers make up a growing share of your customer base.
Low credit scores often block access to traditional financing. Many shoppers with low or subprime credit scores are declined by primary lenders, even for essential purchases.
How you talk about financing matters. Empathetic staff who know how to talk about financing options and visible signage can help customers explore pay-over-time options with confidence.
Snap’s alternative financing drives growth. With flexible terms, fast applications, and full transparency, Snap empowers you to close more sales and support more shoppers.
Many customers need payment options beyond traditional financing. Snap Finance can help more customers get what they need now.
More than 47 million Americans are considered subprime borrowers – up 1.2 million in the last year. That’s an increasingly significant number of customers who are shopping in your store and may be forced to leave empty-handed.
When the cost for tires, furniture, appliances, mattresses, electronics, and more is higher than your customers’ budgets allow, paying over time can help more customers get what they need now, even if they have less-than-perfect credit.
Snap Finance’s comprehensive solutions can help you grow your business and reach more customers. Here are four questions you may have about the subprime customer segment and your business.
1. How many customers have subprime or low credit scores?
Consumers with credit challenges make up a significant portion of your potential customer base. In addition to the 47 million Americans who are considered subprime borrowers, more than 26 million people in the U.S. are considered credit invisible with no credit record and another 21 million have too little information to create a score with the three major credit bureaus (TransUnion, Equifax, and Experian).
Don’t overlook this important, often underserved customer segment, especially as inflation and the economy affect consumers’ financial well-being.
Even if your store caters to more affluent customers, those with lower credit scores are still likely shopping at your store. At nearly every income level, the financial effects from a lost job, medical emergency, or simply several missed payments can send credit scores tumbling.
Offering Snap can provide an alternative to traditional financing, helping more customers get what they need while potentially increasing your average order value and opening new revenue streams for your business.
2. Is securing traditional financing difficult for those with a low credit score?
Having a subprime credit score is considered a relatively high credit risk for traditional lenders, which is why many of these consumers struggle to secure new loans, credit cards, and/or other financing.
What lenders consider subprime varies, but a FICO® score below 670 can often be a roadblock to securing traditional financing. And according to Experian, 35% of consumers have a credit score below that threshold.
When your customers need to purchase big-ticket, essential items, they often turn to financing. Shoppers who don’t qualify for financing from a primary lender may be approved by a secondary lender under different terms.
But what if they don’t qualify for traditional financing? Subprime or tertiary financing solutions, including pay-over-time options from Snap, can help fill that gap for consumers.
3. How do I talk about Snap’s options to help close the sale?
Money is an uncomfortable topic for most people, and it’s a particularly challenging conversation for people who wonder if they’ll be turned down for financing. If your customers are reluctant to begin a conversation about alternative financing, they may never know options exist. Don’t let consumers’ hesitancy – or yours – create lost sales opportunities.
With Snap, you can easily promote options to pay over time on your website and in your store.
In-store advertising and a knowledgeable sales force play an important role in informing customers about those options. Among those with lower credit scores, Snap found that 14% trust retail associates to recommend the best financing for their situation.
To help customers and close more sales, ensure your sales team is well-versed in available options from Snap and can easily walk customers through the application process.
Your customers with credit challenges have likely been turned down for previous financing, and may bring some amount of anxiety, embarrassment, and dread to the shopping experience. Begin financing conversations with empathy, recognizing the stress many customers are feeling. In addition, be sure to maintain transparency about all terms and conditions. Clearly explain how payments work, what they include, and any potential additional costs involved.
4. How can Snap meet my customers’ needs and help grow my business?
As a Snap Partner, you know the power of offering convenient pay-over-time options. Snap looks at more than credit scores from the three major credit bureaus (TransUnion, Equifax, and Experian) to help more customers get what they need now. By better integrating Snap’s pay-over-time options into your strategy, you’ll not only support your customers’ financial well-being but also open new revenue streams for your business.
Here are just a few of Snap’s advantages for your customers:
· Up to 18-month terms
More time to pay means lower regular payments.
· Easy application
Customers can apply in minutes and get a decision in seconds.
· Payment options
Payment due dates and frequency can be changed at any time.
· Full transparency
Our fees are communicated in the customer’s agreement and we don’t charge cancellation or late fees.
Snap Finance can help you help customers with subprime credit
Many of your customers need payment options beyond traditional financing – options that help them quickly get what they want and need now.
Discover how Snap’s in-store and online solutions can support your business growth. Learn more.
Snap-branded product offering includes retail installment contracts and lease-to-own financing. Talk with your local Snap sales representative for more details on which product qualifies at your store location. For more detailed information, please visit snapfinance.com/legal/financing-options.
¹While no credit history is required, Snap obtains information from consumer reporting agencies in connection with submitted applications. Not all applicants are approved.