Effectiveness of finance
We are able to carry out detailed analyses of how finance is operating in your business with a view to maximising its effectiveness. This includes covering some or all of the following questions:
- Are you generating the right management information to monitor the finance element of your business?
- Do you have the right loan product mix, (0%, interest bearing credit, Buy Now Pay Later) for your particular underlying product type and average order value?
- Do you have the right mix of lenders to maximise the overall loan acceptance rate?
- Are you leaking sales unnecessarily through cancellations or loans not being taken up by customers?
- Do you have an effective sales process which gives customers all payment options in a transparent manner?
- Do you understand the reasons why some customers are being declined for loans?
- Is the customer journey as simple and effective as it can be to enable sales?
- Are you running any undue regulatory risks as a credit broker?
Where possible we will suggest enhancements which will make finance more effective for your business and will likely lead to a higher rate of underlying product sales.
Benchmarking of commission/subsidy rates
The only way to get the best commission/subsidy terms from lenders is to test the market regularly. Lenders can become complacent if they have worked with a retailer on an exclusive basis for many years and the retailer may be receiving poor terms. Often, the retailer will not know this as he has nothing to benchmark against.
We have experience of running tenders for large and small organisations and will tailor a process based on the retailer. This will include preparation of a business description document to brief the lender on the underlying product and market. This will maximise the ability of lenders to offer their best terms. The improvements in commission/subsidy rates from a focussed tender are likely to be sizeable.
Even if your lender contracts are not due to expire for some time we can still assist you in identifying areas in which current arrangements could be improved so that early conversations can be had with your existing lender.
Contract reviews
Lenders often present retailers with their standard ‘terms of business’ or ‘retailer operating agreement’. These documents are written from the lenders point of view and do not always work for the retailer. Let us help you to rebalance the scales by ensuring that your ultimate contract is fair for you as well as the lender.
New products/market intelligence
Through our extensive network in the consumer credit industry we are able to brief you on new trends and products in the market. The lender market is constantly evolving with new lenders joining and other lenders withdrawing from the market. Market intelligence is vital for you to stay on top of the latest products which you can use to enable sales in your business.
Compliance healthchecks
As a credit broker you can only offer loans to customers if you comply with the FCA rules at all times. Lenders will frequently try to impose an approach which suits them – as many of them are large banks – their approach tends to be very ‘large organisation specific’. If you need some truly independent advice on process design and FCA compliance we have experience of achieving compliance without creating undue bureaucracy and/or stifling your business.
Lender management
Merely having a lender providing loans to your customers does not ensure that your sales will be maximised. There has to be regular interaction with the lender to ensure that the loan product and process remains suitable – and to ensure that the lender is performing their functions as promised. We can help you manage the lender on a monthly/quarterly basis around the following areas:
- Finance penetration rates and average loan values
- Reasons for cancellations
- Any trends in loan delinquency
- Movements in the acceptance rate
- Is a second or a third lender needed to ensure the acceptance rate is maximised?
- Any lessons learned from the loan application process
Get In touch
For an initial discussion about how we can help your business to become more profitable you can reach us below: