How Leveraging Lease-to-Own Financing Can Boost Your Business

Drive incremental revenue to your mattress business.

When you’re in the business of selling mattresses, you’ve likely come across many shoppers who didn’t have all the funds to make their purchase.

Resolving this situation by offering an in-store credit option seems like the most logical way to close the deal, right? Unfortunately, only offering traditional in-store financing can cause you to lose out on significant sales. This is because many of your customers may have less-than-ideal credit, making it difficult for them to get approved for in-store credit.

More customers are in this situation than you may realize. A 2021 study by Experian found that about 30% of American consumers have subprime credit. What’s more, 32% of consumers can’t cover a $400 unexpected expense.

Thankfully, there’s a way you can reach these customers and prevent missed sales opportunities. Offer them lease-to-own financing – a flexible financing option that can drive incremental revenue to your mattress business.

What Is Lease-to-Own Financing?

Lease-to-own is not a loan or credit. Instead, a lease-to-own finance company purchases the merchandise from the business and leases it to the customer. The customer is able to take home and enjoy the item while making lease payments over time. Once the terms of their lease are fulfilled, they obtain complete ownership of the item.

Depending on the provider, applying for lease-to-own may not include a credit check from the three major credit bureaus (Experian, TransUnion, and Equifax). Instead, the customer would have their credit report pulled from special providers. Additional data, such as monthly income and having an active checking account, could be looked at as well to significantly increase the likelihood of approval.

Plus, when you partner with a lease-to-own finance company, you do not take on any of the potential risk that could come from a customer defaulting. The lease arrangement is between the consumer and the financing provider. So if a customer defaults, the provider takes the hit — not your business.

Top Three Benefits of Lease-to-Own Financing

Lease-to-own financing can have a tremendous impact on the growth of your business. It can increase your conversion rate and boost your bottom line. Here are three ways it can benefit your business.

Reach More Customers

A recent report from Oliver Wyman stated that 57 million people in the U.S. have subprime credit scores and 28 million are credit invisible. That’s a total of 85 million people who could use an alternative to traditional financing. Lease-to-own financing gives customers of all credit types a chance to get the mattress they want now and make easy payments over time. By offering this option in your store, you can tap into this underserved customer segment who want your product but can’t afford to pay for it all at once.

Increase Average Order Value

Through lease-to-own financing, instead of paying for everything in a single transaction, your customers can make budget-friendly payments that align with their paydays. This may result in them choosing the higher-end mattress they had their eye on, leading to more satisfied customers and more closed sales at higher amounts.

Generate Repeat Business

In addition to gaining new customers and more sales, lease-to-own financing can drive repeat business. It gives those with poor credit or no credit the financial flexibility to enjoy high-price items. This positive customer experience can cement customer loyalty and retention. Snap Finance®, a lease-to-own provider, even markets directly to your customers through their Snap EDGE program, encouraging them to keep coming back to your store.

In Conclusion

Providing people of all credit types a way to get approved for financing can grow your customer base and boost your sales. Ready to unlock your business’s full potential? Visit Snap Finance to learn more about the difference Snap can make for your business.

The advertised service is a lease-to-own agreement provided by Snap RTO LLC. Lease-to-own financing is not available to residents of Minnesota, New Jersey and Wisconsin.