How Third-Party Financing for Your Customers Can Boost Your Business

Imagine being able to say “yes” to more customers because they can afford your services. For many home improvement contractors and dental clinic owners, third-party financing for their customers is a game-changer. Instead of losing clients who can't pay the full cost upfront, offering financing for your clients allows them to pay over time and helps you close the sale. In this guide, we'll explore how third-party customer financing works, why it boosts business (with real stats to prove it), and how you can easily add financing options to your small business. A friendly financing option can be a win-win for both your customers and your bottom line.

What is Third-Party Financing for Customers?

Third-party customer financing is a program where an outside financing company pays your business upfront for a sale, while your customer pays that financing company back over time in installments. In other words, you partner with a third-party financing provider that acts as the lender for your clients. The customer typically applies for financing at checkout (often through a quick credit application), and if approved, they can split their bill into affordable payments, such as monthly installments over 6 or 12 months. This approach is also known as customer financing or financing for clients, and it allows even cash-strapped customers to obtain your product or service now and pay later.

Unlike in-house financing (where you, the business owner, issue a loan directly and manage collections), third-party financing is handled entirely by the financing company. They take care of the credit check, loan approval, and collecting payments, while you get paid right away. One popular form of third-party financing is the "buy now, pay later" model used in retail e-commerce, which often provides short-term, interest-free installment plans. For larger purchases – like a home remodeling project or a dental procedure – third-party financiers can offer longer-term payment plans, sometimes with promotional 0% interest periods or other favorable terms. Essentially, you get to offer your customers the convenience of a loan without your business becoming a bank.

How Third-Party Financing Boosts Your Business

Offering customer financing isn't just a nice gesture – it can have a direct, positive impact on your bottom line. Here are some of the key ways that adding third-party financing options can benefit home improvement and healthcare businesses:

Attract more customers and close more sales: High upfront prices often scare away potential clients. By providing a monthly payment option, you remove that sticker shock and expand your customer base. Customers who might have walked away due to cost can now say "yes" to your proposal. According to Intuit QuickBooks, offering financing helps businesses attract shoppers who can’t afford the full cost upfront and encourages them to complete their purchase. In fact, service businesses have reported increasing sales by up to 20% simply by offering financing options. When the cost is broken into smaller chunks, more people will move forward instead of putting the project off.

Higher average order value (bigger projects and upgrades): When customers have access to financing, they tend to spend more. With the burden of a lump sum payment lifted, clients are more likely to opt for that additional service or higher-end upgrade. One industry guide noted that customers with monthly payment plans typically spend up to 20% more on upgraded services. Similarly, small businesses that offer customer financing often see higher average order values, meaning larger jobs and higher revenue per sale. Instead of choosing the cheapest option, your customer might choose the better option because they can pay over time.

Better cash flow with fast payment: With third-party financing, you usually get paid in full by the financing company shortly after the sale is made. You don’t have to wait months while the customer makes payments. This improves your cash flow and working capital immediately. It’s essentially like a normal sale on your end – you receive the funds (minus a small fee) upfront, while your client gets to pay over time. For example, Synchrony Financial (a major financing provider) pays its merchant partners within two days, so businesses get the money quickly and with less risk. Improved cash flow means you can pay for materials, cover your staff, and take on the next project without cash crunches.

Competitive edge and customer loyalty: Offering financing can set you apart from competitors who require full payment upfront. If a homeowner is deciding between two contractors, they’re more likely to choose the one with easy financing. Likewise, patients needing an expensive dental procedure will favor a clinic that helps them with a payment plan. Providing financing shows you care about your customers’ constraints, which builds goodwill and loyalty. Customers who use your financing are also more likely to come back for future needs (or refer friends) because you made an otherwise unaffordable service attainable. Research by Synchrony found that financing options lead to more traffic, higher sales, and increased repeat business for merchants. Moreover, younger consumers now expect flexible payment options – a 2023 Experian survey found that 54% of Gen Z and 52% of millennials feel more comfortable using alternative financing methods (like installments) over traditional credit cards. Catering to these preferences gives your business an edge in capturing the next generation of clients.

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Customer Financing in Home Improvement Contracting

Home improvement and remodeling projects are often costly investments for homeowners. Whether it's a new roof, a kitchen renovation, or an HVAC system replacement, these projects can run in the thousands (or tens of thousands) of dollars. It's no surprise that many homeowners hesitate or postpone much-needed upgrades due to budget constraints. By providing a third-party financing option at the point of sale, contractors can turn those hesitant "maybes" into confirmed jobs. For instance, if a homeowner is faced with an $8,000 bathroom remodel, not everyone has that cash on hand. But if you offer a payment plan – say, around $133 per month for 5 years – the project suddenly becomes much more feasible for the customer. Many roofing, HVAC, and remodeling companies already leverage customer financing options like this. In fact, promotional financing offers (such as "0% interest for 12 months") are common in the home improvement industry to entice customers. This not only helps homeowners get the improvements they need, but it also helps contractors upsell more comprehensive solutions. Instead of settling for a patchwork repair or a cheaper product, a client might agree to a higher-quality solution when they can spread out the payments. The result for contractors is a boost in business. You can take on larger projects that might otherwise be out of reach for your clientele, increase your close rate on sales estimates, and differentiate your services. As mentioned earlier, financing can lead customers to opt for bigger projects and upgrades, increasing project sizes and revenue by a significant margin.

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Customer Financing in Dental Clinics and Healthcare

Nowhere is the need for financing more apparent than in healthcare fields like dentistry. Dental and medical procedures can be expensive, and even patients with insurance often face large out-of-pocket costs. It's common for patients to delay or forgo important treatments (like getting a tooth implant or orthodontic work) because they simply can't afford the lump sum. By offering third-party patient financing, dental clinics can make essential care accessible while increasing their treatment acceptance rates. Consider a scenario: a patient needs a procedure that costs $2,000. Without financing, they might postpone it, risking their health (and leaving the dentist with an empty slot). But if the clinic offers a payment plan – perhaps ~$100 a month for 20 months – the patient is far more likely to proceed with treatment. This is not just hypothetical; it's reflected in consumer behavior. According to Synchrony Financial, 75% of its cardholders always seek promotional financing when making a major purchase, and even a $500 expense is a significant commitment for many consumers. Providing financing helps them get what they need. In healthcare, a bill of a few hundred dollars or more can feel like a major purchase for a family, so having a financing option is crucial. Patient financing programs (offered via third-party companies) have become standard in dental and medical offices. For example, CareCredit (a healthcare credit card program) is accepted by over 200,000 providers nationwide, underscoring how prevalent patient financing has become. By integrating these customer financing solutions into your practice, you not only boost your case acceptance and revenue but also improve patient satisfaction. Clients appreciate a clinic that provides a manageable way to pay for care – it shows empathy for their financial situation. In the long run, this leads to better patient loyalty and more referrals. A patient who uses your financing plan to get a much-needed treatment is likely to trust your clinic for future needs as well, because you helped them overcome a financial hurdle.

How to Add Financing to Your Business

Implementing a customer financing program may sound daunting, but it's quite straightforward. Here are the basic steps for adding third-party financing to your small business:

• Research and choose the best program for your needs: Start by looking for third-party financing companies that serve your industry (some specialize in retail, others in home improvement or medical financing). To find the best customer financing program for your business, compare key factors: the interest rates and fees charged to the customer, any fees charged to you as the merchant, the application and approval process, and the credit limits offered. You’ll also want a provider that is reputable and provides good support.
  
  
• Sign up and integrate the financing option: Once you've selected a financing partner, enroll in their merchant program and integrate their financing tools into your sales process. The provider will usually give you what you need to offer financing at your point of sale or on your website. This could include a portal to submit loan applications or a software plug-in for your checkout system. Work with the provider's support team to get everything set up correctly. In many cases, adding a financing option to your checkout or invoicing system is straightforward. Test the process yourself so you understand how a customer will apply and get approved. Integration is typically not difficult – many popular point-of-sale and online invoice systems can incorporate third-party financing options seamlessly.
  
  
• Train your staff on the financing process: Educate your team about how the financing works so they can confidently explain it to customers. Staff should know the basic terms (e.g., "0% interest for 6 months" or "X% APR for 12 months"), how to guide a customer through the application (whether it's an online form or a paper form), and what to do once the customer is approved. Emphasize to your employees when to offer the financing. For example, whenever presenting a quote above a certain dollar amount, they should mention, "We have financing options available if you need them." A well-trained staff can significantly increase the uptake of financing programs, resulting in more closed sales.
  
  
• Promote the financing option to your customers: Finally, make sure customers know you offer financing. Add messaging in your marketing materials, website, and in-store signage that customer financing is available. For instance, display a note on estimates and invoices like "Ask us about financing options!" Use email campaigns or social media to announce that you have a financing program for those who need it. You should also advertise it at the point of sale – on your product or service pages, quote documents, and so on. The easier it is for customers to learn about the option, the more likely they are to use it. By proactively spreading the word, you’ll get more people opting to finance their purchase through you.
  
  

Ready to Boost Your Business with Customer Financing?

In conclusion, adding a third-party financing option for your customers can be a transformative move for your business. It helps your clients afford what they need and helps you increase sales, all without you having to become a lender yourself. The key is to partner with a trusted financing provider and to make the process smooth and transparent for your customers. When done right, customer financing is truly a win-win solution. If you're ready to take the next step, consider partnering with a specialist like FinMkt. FinMkt specializes in customer financing solutions for businesses just like yours – from home improvement contractors to dental and medical clinics. Their platform makes it simple to offer financing to your customers, with flexible programs and a seamless application process. Working with an experienced partner can remove the heavy lifting of setting up financing on your own. Offering third-party financing has never been easier, and it's fast becoming expected by consumers. By implementing the right financing program, you can stand out from competitors, take on more projects, and build stronger customer relationships. In other words, you're empowering your customers to buy from you now and pay over time – which ultimately boosts your business.

Ready to explore customer financing further? Consider reaching out to FinMkt to see how their solution can help your business add financing options and reach new heights.

Sources:

• QuickBooks Small Business Blog – Customer financing: A guide for businesses
• GetJobber Academy – How to Offer Financing to Customers​
• Synchrony Financial – Synchrony Business: Consumer Financing Benefits
• ‍LoanStar/Experian – Financing preferences by generation (Experian 2023 survey)​