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If you own or run a business that has a product or service that sells for $300 or more, chances are that you have searched for second-look financing or other ways to provide your customers a method of payment to purchase your product or service should they not have the cash, room on their credit card, or are denied by your primary financing option. Nothing is more frustrating then when a customer is ready to buy your product and gets denied for financing. It is like revenue flying out the window.

The best way to solve this problem is with the use of second look financing or sub prime financing programs. Generally these terms can be simply defined as financing for customers that have credit scores in the low 600’s and below. Every first look lender has different criteria for approval and it can vary greatly depending upon the product or service being sold.

Second-look consumer financing or sub prime consumer finance programs that work for your business can be tough to find. You can’t just apply for them at your local bank and most primary consumer lending institutions do not do business in the sub prime world. In addition to being tough to find, each company can vary greatly when it comes to how they structure their programs and what industries they do business in.

Here are some tips to help you find sub prime lenders:
1. Search for “debt buying companies” as opposed to “finance companies”. Many of today’s debt buyers have consumer financing programs and are used to dealing with sub prime debtors.

2. Talk to other businesses in your industry. One of your “friendly” competitors may already have a successful program in place.

3. Contact billing or servicing companies. Many billing or servicing agencies collect paper for debt buyers or other finance companies that deal in second look finance. They might refer you.

4. Ask your first look lender for a recommendation on what to do with turn downs. They may partner with sub prime companies on other deals they are doing and these companies might work with your deal.

5. Work with a receivables management consulting who can build a customized program working with their network of second look financing lenders. Generally these firms earn fees from lenders so the work they do for you costs you nothing and you get much better results in a much shorter time frame.

6. Check with your local banker in charge of commercial accounts. Commercial bankers get asked all of the time by their customers about consumer finance programs which they typically don’t do. He or she may have a referral for you.

In the near future I will discuss some of the important factors involved in working with a lender, once you have found one, to get the best program that is right for your business and your customers.