Consumer finance programs for merchants: How they work and why they matter
A financing program can become part of a merchant’s broader sales strategy – from reaching shoppers with different payment needs to creating a smoother path to get what they need. Learn how to evaluate consumer finance programs and integrate lease-to-own financing into your customer journey.
Key takeaways
Expand payment options. Consumer finance programs may help eligible shoppers get what they need when paying upfront or using traditional credit may not work.
Think beyond checkout. Make lease-to-own financing visible earlier so customers can explore payment options before they’re ready to buy.
Evaluate the full partnership. When comparing providers, consider the customer experience, integrations, training, support, and reporting.
Give more shoppers an option. Snap Finance’s lease-to-own financing is open to applicants across a wide range of credit types, with no credit history required to apply.1
Customers do not all approach a purchase with the same budget, credit profile, or preferred way to pay. For merchants selling higher-ticket or essential products and services, offering only cash, debit, credit cards, or traditional financing may leave some shoppers without a payment option that works for them.
That’s where consumer finance programs for merchants can come in. Instead of creating and managing payment plans on their own, businesses can work with third-party providers to give eligible customers additional ways to get what they need.
But offering access to financing is not just about adding another option at checkout. Merchants should consider who a program can serve, how easily customers can find and explore it, how it fits into the sales journey, and what kind of support the provider offers after launch – all of which is covered below.
What are consumer finance programs for merchants?
Consumer finance programs for merchants are third-party payment solutions that businesses can make available to customers during the purchase journey. The provider typically manages the application, eligibility process, financing agreement, and other program requirements, allowing the merchant to offer financing without building its own payment program.
Depending on the provider, merchant, and purchase, customer financing programs may include:
Installment loans
Retail installment contracts
Lease-to-own financing
Other point-of-sale payment solutions
These options do not all work the same way. Eligibility requirements, terms, available amounts, merchant processes, and customer obligations can vary significantly by provider and program.
For merchants, the goal is not necessarily to find one financing product that works for everyone. It is to understand which options could complement existing payment methods and create more workable paths for the customers the business serves.
Why do businesses make financing available to customers?
Businesses may offer access to financing to customers because shoppers may need or want a product without wanting to pay the entire cash price up front. A broken refrigerator, new set of tires, updated mattress, or other significant purchases can create a need before a customer has planned to pay for it.
Traditional financing may work for some shoppers, but it may not be able to serve everyone. Adding other financing options may give merchants more opportunities to serve customers who are ready to buy but need a workable payment option.
Beyond expanding payment choice, financing, including lease-to-own financing from Snap Finance, may support other merchant goals. Giving eligible shoppers another payment option may create additional opportunities to complete transactions and help customers consider products that better fit their needs. It may also give merchants another way to support the customer experience without relying solely on discounts.
A financing strategy may give shoppers more ways to evaluate available payment options while helping merchants support customers through the sales process.
How can consumer finance programs for merchants expand the customer base?
If a business only offers prime financing, shoppers who do not qualify may be left without another available payment option and may leave without completing a transaction.
A broader mix of financing programs for businesses, including lease-to-own financing, may help merchants serve consumers with different credit profiles and payment needs. Inclusive options, for example, may help create another potential path for shoppers who have limited access to traditional credit.
That is one reason merchants may choose to make financing information available before checkout. Some shoppers may consider available payment options when deciding where to shop, particularly if they expect to need financing.
Merchants can therefore think about financing as part of the broader customer journey and acquisition strategy. Making inclusive payment options, like those available through Snap Finance, visible in advertising, on product pages, and throughout the shopping experience can help customers understand their options before they decide where to buy.
Which consumer financing options should merchants consider?
There is no single financing solution that fits every merchant or customer. Instead, businesses should understand the main categories and consider how they could work together.
Traditional or prime financing may serve shoppers who meet the lender's credit requirements and want to finance a purchase over time.
Installment financing generally allows eligible customers to borrow money and repay it through scheduled payments over a set period. Terms and eligibility vary by provider.
Lease-to-own financing can provide another option for eligible customers, including shoppers who may not qualify for traditional financing. The customer makes scheduled payments for the use of eligible merchandise and can obtain ownership according to the terms of the agreement.
Other pay-over-time solutions may also be available depending on the merchant, transaction, customer, and provider.
The right mix depends on factors such as your products, average ticket, customer base, online and in-store sales channels, and any programs you already offer. Rather than expecting one solution to serve every shopper, consider whether multiple payment paths could help address different customer needs.
If you’re just beginning to explore different consumer finance programs, start by comparing two of the most common options: lease-to-own vs. buy now, pay later.
What should merchants look for in a consumer finance program?
Choosing among merchant financing programs requires more than comparing a single approval or pricing metric. The financing experience can affect your customers, employees, operations, and overall sales process, so it is important to evaluate the complete partnership.
Consider factors such as:
Customer eligibility and reach: Who may be able to use the program?
Application experience: Is the process quick and straightforward?
Mobile experience: Can shoppers easily apply from their phones?
Sales channels: Is financing available online, in-store, or both?
Merchant funding: How and when does the merchant receive funds?
Integration: Can the solution work with your ecommerce or point-of-sale systems?
Employee training: What resources help associates understand and introduce the program?
Merchant support: What help is available when questions or issues arise?
Marketing resources: Does the provider help you communicate financing availability?
Reporting: Can you see how the program performs and where opportunities may exist?
A financing provider should fit into the way your business actually sells and operates. A strong customer-facing experience matters, but so do implementation, training, ongoing support, and your ability to understand performance.
Make customer financing easy to find and understand
Even a well-matched financing program has limited value if customers do not know it exists.
Do not wait until checkout to introduce payment options. Instead, make available financing options visible at relevant points throughout the customer journey, including your:
Homepage
Category and product detail pages
Dedicated financing page
Cart and checkout
In-store signage
Associate conversations
Email and SMS marketing
Social media
For e-commerce merchants, visibility can be especially important because shoppers may evaluate affordability long before they reach the cart. Bringing financing information into the browsing experience gives customers an opportunity to explore their options earlier.
Consistency matters, too. If your website prominently promotes financing but your store associates rarely mention it – or vice versa – customers can end up with a fragmented experience. Keep messaging and approved program information aligned across channels.
Train employees to treat financing as part of customer service
Your employees do not need to become financing experts, but they should understand which options your business offers and how customers can learn more.
Give associates simple talking points, clear instructions on where customers can access the application, and guidance on where to direct customers for full program information. Make financing information consistently available as one of the ways to pay rather than waiting until a shopper shows hesitation.
That approach can make the conversation feel more like customer service and less like a last-ditch effort to close a sale.
At the same time, employees should know where their role ends. They should direct customers to the application and approved program materials for complete terms, eligibility information, and agreement details rather than completing or assisting with the customer’s application or trying to interpret or explain financial agreements themselves.
Measure whether your consumer finance program is working
Do not judge a financing program by application volume alone. Look at what happens throughout the customer journey to understand whether the program supports your broader business goals.
Depending on the data available to you, useful KPIs may include:
Application starts
Approval activity
Approval-to-completed-transaction conversion
Funded transaction volume
Financing adoption rate
Average order value
First-time customer activity
Repeat customer activity
Looking at the full funnel can also help uncover friction. For example, customers may start applications but fail to complete them, or approved shoppers may not ultimately complete a transaction. Those patterns may indicate areas to review, such as the application experience, employee training, program visibility, or sales process.
The goal is to understand not only whether customers use financing, but how lease-to-own financing and other options fit into overall business performance.
What makes Snap Finance’s consumer financing for merchants unique?
For merchants looking to create additional paths for customers, consider Snap Finance’s lease-to-own financing.
With lease-to-own financing, Snap Finance purchases the eligible merchandise from you and leases it to the customer, who makes scheduled payments until they complete the terms of their agreement.
In addition to lease-to-own financing, Snap Finance, its affiliates, and partners may make other consumer solutions available, including installment loans, retail installment contracts, credit cards, and other products, depending on the merchant, state, and qualification criteria. These products may involve independent merchants or bank partners.
Snap Finance places a focus on both the merchant and consumer experience alike through a streamlined application process, merchant support, marketing resources, and ecommerce capabilities.
The goal is not simply to add another payment button. By incorporating financing messaging throughout the customer journey, merchants can give more shoppers an opportunity to explore available payment options while making financing a more integrated part of their sales strategy.
Is a consumer finance program right for your business?
Start by looking at what already happens during your sales process.
Do customers walk away because paying the full cost up front does not work for them? Do shoppers ask for additional payment options, postpone purchases, or choose a less complete option because of the upfront cost?
While the answers will vary based on your customer base, products, average ticket, sales channels, and growth goals, reviewing these potential opportunities may help you determine whether a consumer finance program aligns with your business needs.
When evaluating options for your business, consider whether a consumer finance program helps you serve customers and provides clear ways to measure program performance.
If you’re interested in exploring financing solutions built to support merchants and the shoppers they serve, partner with Snap Finance today.
Whether you’re already a Snap Partner or still exploring your options, there’s more to consider when building your financing strategy. Explore these additional resources from Snap Finance:
1 Not all applicants are approved. Approvals subject to underwriting qualification criteria.
Snap Finance, its affiliates, and partners offer consumers a range of solutions, which may include lease-to-own financing, retail installment contracts, installment loans, and credit cards. Product availability may vary by state, merchant, industry, and qualification criteria. Certain products are issued by independent merchants or bank partners and serviced by Snap Finance LLC.. For more information, visit snapfinance.com/legal/products.