Vendor financing for equipment dealers: how it works and what an enrolled dealer gets

A vendor financing program lets an equipment dealer or manufacturer put a financing option on every quote, so a customer who wants the machine but can't fit it in this quarter's budget becomes a monthly number instead of a lost sale. iFinancial Group runs one for dealers in all 50 states. An enrolled dealer gets an account contact, a way to send the customer the one-page application with the equipment already on it, a direct lane for deals another lender declined, and funding at order on qualifying builds. The customer can finance up to $1,000,000 on that one page, with no tax returns and no audited financial statements to apply.

Who you're dealing with

iFinancial Group has funded equipment since 1997, roughly $600 million of it, in all 50 states. We're a direct lender, not a broker, so the file is underwritten in house and not shopped around. Our customers have ranged from independent manufacturers to global technology companies. We've barely advertised in almost three decades. The business came from repeat customers, referrals, and vendors sending us their customers.

What vendor financing is

Vendor financing, also called point-of-sale financing or a vendor program, is a standing relationship between a dealer and a lender so customers can finance the equipment as part of buying it. The dealer quotes the equipment, the customer applies, and the lender pays the dealer. The customer makes payments to the lender, not the dealer, so once the deal funds the credit risk stays off the dealer's books. Decision, documentation and servicing sit with the lender; the dealer sells the equipment and moves on.

Price objections are often payment objections. A $180,000 machine is a capital decision that can mean a banker, a stack of paperwork and a few weeks of waiting. Spread over a term it becomes a monthly number the owner can approve himself, and the conversation moves from whether the business can afford it to which configuration. It also keeps the sale on the dealer's timeline instead of the customer's bank's.

What an enrolled dealer gets

An account contact. A person with a direct line and a direct email, not a portal or a queue. The same person takes the payment questions, the stuck files and the unusual deals, and the time to call is before the quote goes out.

A customer-base campaign. Once a dealer enrolls, the campaign to that dealer's own customers is planned with the dealer's team, so financing reaches buyers who aren't in a sales conversation today.

A direct lane for declined deals. Every dealer has a few: an approved buyer who went sideways, a captive finance arm that said no to the configuration, a bank that wanted three years of financials for one machine. Send the equipment, the amount, who declined it and who to call, with the quote or the decline letter if there is one, and answers typically come back within 24 hours.

Funding at order on qualifying builds. On a custom build or a deal with a deposit, the dealer flags it, and on qualifying transactions iFinancial Group can typically pay at order rather than at delivery.

Pricing isn't published on the open site. An enrolled dealer gets it from the account contact.

The Deal Desk

Every enrolled dealer gets a Deal Desk: one page that holds everything needed to move a financed deal, shareable with the dealer's own salespeople.

Send to my customer. The salesperson enters the customer, the equipment and the amount, and the desk creates the customer's one-page application with the equipment already on it. The customer adds the business details and signs. The salesperson can copy the link, download a prefilled PDF, or open an email in their own inbox with the link already in it, so it comes from them. The dealer stays credited on the deal, and when the customer submits, the salesperson gets a heads-up that they applied. It never includes the customer's financials.

Hand me a deal. When the salesperson would rather not chase it, the desk sends the deal straight to the account contact, who calls the customer. The same form handles a declined customer the dealer wants rescued and a customer the dealer wants pre-approved before the quote goes out.

Where is the deal stuck. The desk carries short, specific language for the spots where a financed deal usually stalls: the deposit, the customer who says he'll use his bank, the buyer another lender declined, the one asking for a payment estimate, the one still comparing quotes. Each one moves the conversation to the application instead of arguing about it.

When the dealer gets paid

On a standard deal the dealer is paid in full once the equipment is delivered and accepted. On qualifying transactions it can be paid at order instead, which is called prefunding, and it changes three things at once: salespeople get paid sooner because commissions tied to funding stop waiting on delivery; the customer keeps their cash because the deposit comes from the lender instead of the customer's operating account; and the dealer's exposure on specials, long lead times and custom configurations drops, because it's paid while the machine is being built instead of carrying the cost to acceptance.

Whether funding at order is available depends on the credit, the equipment and the size of the transaction. In every case the dealer is paid in full, with no carrying terms and no receivable to chase.

Structures the dealer's customers ask for

End-of-term treatment matters to how a customer runs the equipment and the books, so the program covers more than a level payment: a $1 purchase option or a fixed purchase option set on day one; a fair market value lease with lower payments and the buy, return or upgrade decision held until the end; TRAC and PUT leases for titled vehicles and fleet programs; and deferred, step and seasonal schedules shaped to when the equipment starts earning. More on those in payment structures.

Who it suits

Dealers whose equipment is a considered purchase, where the buyer has to justify the spend and the configuration is negotiable: machine tool distributors selling multi-machine cells with tooling and installation in one transaction; medical and dental dealers whose customers are adding operatories, imaging or a service line; construction dealers selling new and used, from inventory or auction; systems integrators selling hardware, licensed software and implementation together; work truck and trailer dealers selling upfit trucks, vans and trailers to contractors; and energy contractors selling solar, storage and efficiency retrofits.

How a dealer enrolls

Enrollment is five fields: name, company, phone, email, and what the dealer sells and what a typical transaction runs. It isn't a credit application. The account contact calls to set up how the dealer's customers will apply, how quotes carry a financing option, and what the account includes. Set it up once and financing is on every quote afterward, instead of being arranged deal by deal. Enroll a dealership.

How it works with iFinancial Group

It's the same one-page application whether the equipment is small or the deal runs to $1,000,000: no tax returns and no audited financial statements to apply, no minimum and up to $1,000,000. Decisions typically come back within 24 hours, and an approval holds up to 60 days. New and used equipment, terms up to 84 months, and soft costs up to 30% so freight, setup and training can go in the same deal. Payment structures beyond level payments are there when the equipment earns unevenly. We've been doing this since 1997, in all 50 states.