Small local businesses lose business to the national companies because they can’t offer finance that makes it easy for the customer to say yes.
That doesn’t mean you should lose out though.
You can still compete for business even when you can’t offer finance facilities and you don’t want to take payment on credit cards.
Make it Easy For Your Customers
Handing over money to a company they don’t know for a product they won’t see for several weeks is a hurdle for the customer to jump over. The easier you make that jump for the customer, the more likely they will order from you.
The problem is that finance facilities cost money for you, the supplier, and you probably want your customers to pay with real money that you see in your account instantly.
Some customers cannot afford to pay for their home improvement project at all without finance. You may be able to point out to them that a bank loan is likely to cost less than finance offered by a double glazing business but double glazing finance is designed to be easy so it is attractive.
Why Don’t More Small Businesses Offer Finance Facilities?
Businesses have to jump through quite a few hoops to be able to offer finance for customers. This may include credit checks and proof of an established business. Even if these are achieved, credit is not free. You are likely to be charged a large percentage – 7-10% which will eat into your profit unless you pass on the cost to the customer.
Increasing your cost to the customer may make you less competitive. The bigger problem is knowing if your customer is going to choose finance. You may have agreed the price already so if your customer decides on finance at the last minute, you will be unable to pass the costs on.
Have Empathy for Your Customer
Having empathy for your customer will help you understand what is going on in their mind that stops them from ordering from you.
There is a perceived idea that the big companies are more reliable. We know that is a fallacy which is evidenced by Everest and Safestyle going bust this year. Your customer doesn’t know that though.
You also have to consider the psychology of buying. Customer’s do not like to feel ignorant so they can default to what they see as logic, i.e, a company wouldn’t be large if they weren’t successful and to be successful they must sell good quality products.
Position Yourself as an Expert
In positioning yourself as an expert, whether representing your own business or someone else’s, it’s important to have a basic understanding of what happens to your customer’s money.
Being able to talk about money with authority will help to instill trust. Often the customer doesn’t like to bring the subject up because they wouldn’t want to be seen as accusing you of cheating them or as being seen as cheap.
Disclaimer: The guidance in these pages is not intended to replace legal advice.
How does using a credit card or finance protect the customer’s deposit?
When your customer pays a deposit with a credit card, they may be covered by section 75 protection which means that the credit provider is jointly liable with the supplier for ensuring that the customer receives what they paid for. It’s not an easy claim to make or win but in theory, it offers peace of mind for your customer. Paying the deposit with cash or a debit card offers no protection at all.
What is section 75?
Section 75 protects your customer when they use credit in the form of a finance agreement or credit card for purchases between £100 and £30,000. The law states that the credit provider is jointly liable for their purchase. It was put in place to protect buyers from paying the debt for a purchase they do not see the benefit of because it is not as it should be or did not arrive. It requires that the transaction takes place directly between buyer and seller.
Payment through some processors counts as ‘payment via third party’ and can invalidate the claim. This is a loophole that campaigners are trying to have changed but in the meantime, if your competitor is another small business, you could point out to your potential customer that they should check if the supplier is a third-party processor for payments and finance. There is no such thing as a definitive list of companies that use a third-party processor.
If they are buying from a larger company, they are likely to be dealing direct with the finance company, so that won’t apply.
Chargeback
Chargeback works in a similar way to Section 75 in that it gives your customer a chance of getting their money back for goods that are faulty, a service wasn’t provided, or the goods were not delivered because the company went bust. It is not a legal right in the same way that Section 75 is. It is part of the service offered by Visa, Mastercard and Amex. The onus is on the bank or card provider to claim the money back from your supplier’s bank. A claim can only be made if all other avenues have been exhausted.
Although there is no limit to the amount you can claim on chargeback, it is less relevant to the home improvement industry because of the time limit imposed on claims. You have 120 days to make the claim, but with high-cost items, it can take longer than that to realise that the company will not rectify the situation.
Differences between Chargeback and Section 75
“Customers are always looking for peace of mind. Being able to discuss protection for their money is a handy tool to carry in your sales bag.”
What to do When You Want Your Customers to Pay Without Credit Cards or Finance
Ideally your customers will pay you by bank transfer. This has no cost associated with it and you can see the money in your account immediately. Make sure you are asking them to pay into a business account. They are likely to be wary of paying into a personal account even if you are a sole trader.
Be Open and Honest
It will help you to be open an honest with your customer. There are benefits to dealing with local companies and as long as they are still getting the value for money and feel safe, most people like to support a local business.
Explain that you are able to keep your prices fair when you don’t have to incur additional costs. Assure them of any protection you have. If you are registered with Certass or Fensa, it’s likely you have deposit protection in place. If you don’t take a depoit, read our article – Should You Take a Deposit?
Buy Local
When you’re competing against big national companies offering finance deals, it’s important to show customers why choosing a local double glazing business is the better option. Local companies can offer a more personal service, taking the time to understand each customer’s needs.
You know the local climate and building regulations better, so you can recommend the right products that will last longer and work best for the area. Plus, your pricing is straightforward—no hidden fees or long-term interest like with finance deals. Customers will also get faster service and easier aftercare because you’re just around the corner.
By choosing a local business, customers are also supporting their community, keeping their money local, and boosting the local economy. Local companies like yours depend on their reputation, so you’re more likely to go the extra mile to keep your customers happy. While finance deals might spread payments over time, the overall value of working with you comes from your expert advice, high-quality workmanship, and long-term commitment to great service.
Design a Script
You never want to sound like you’re reading from a script but if you take the time to write down all the things you want to say to show why you are the best choice, it’s worth noting the reasons and refining your talk over time.
Here’s a list of benefits you might want to include:
- Personalised service
- One point of contact
- Tailored advice for local needs
- Transparent pricing with no hidden fees
- Quicker response times
- Faster installation and aftercare
- Better knowledge of local climate and regulations
- Direct communication and accountability
- Supporting the local economy
- Stronger community connections
- Higher quality workmanship
- Local reputation and trust
- Custom solutions for unique homes
- Environmentally friendly (less transportation emissions)
- No middlemen or third-party subcontractors
