Vendor financing is the lending of money by a lending institution through an equipment seller to a business customer, who in turn uses that capital to buy that same vendor's products or services. The money is being provided by a lending institution like First Citizens to the customer to purchase equipment or services provided by the vendor.

When you offer vendor financing, you're able to:

• Support new ways customers can purchase equipment, including as-a-service sales and usage-based purchase and rental structures
• Lower accounts-receivable operational expenses through technology, people and process integration
• Better ensure a positive customer journey from initial funding through account upgrades, renewals and disposal
• Establish and execute on a custom program that aligns with growth and profit objectives
• Offer announcements and special offers within customer invoices

Let's say a landscaping company needs a new mini excavator. The owner of the landscaping company goes to their local equipment dealer to purchase the excavator, but they don't want to tie up cash flow by paying the full cost of the equipment upfront. The local dealer can offer customers financing options to pay for purchases over time through a lending partner that understands their customers' needs.

There are many benefits to offering vendor financing through your business, both as an equipment seller and buyer.

As an equipment seller, offering financing to your customers can help you:

• Drive margin-rich products and services
• Bundle equipment and services into one monthly invoice
• Reduce accounts receivable collections
• Reduce fees paid to credit card companies
• Close sales faster
• Get paid fast with rapid funding on documented and installed systems

You also have the ability to sell based on monthly payments rather than total cost, so you may be able to improve profit margins by offering upgrades to equipment, software and services.

As an equipment buyer, choosing financing can help you:

• Stay on budget with predictable monthly payments
• Maximize productivity with the latest technology and equipment
• Lower your upfront costs
• Get more flexibility than cash-only purchases allow
• Bundle your entire solution—including hardware, software and services
• Upgrade or add on to existing equipment as your needs change