I was reading an interesting article in Smart Money titled, "The $20,000 Pet" today. As quoted in the article, a report by market-research company Packaged Facts stated that Americans spent $20 billion on veterinary bills in 2010 — an 8.5% increase from a year earlier and more than double the amount spent just a decade ago. It went on to say that pet owners often don't argue when a vet recommends treatment for a beloved pet. Stating that a recent survey by the Associated Press and Petside.com found that 35% of pet owners said they were very likely to pick up $2,000 in vet costs to treat a sick dog or cat, while 22% said they'd pick up $5,000 in vet costs. Much of that money is being spent on new medical technology.
The article goes on to point out that pet insurance is benefiting from this trend and becoming more popular with pet owners which is driving up premiums more than 20% annually. Still, pet insurance is used by a small percentage of pet owners and the benefits offered are limited in many cases. So all this begs the question, "how do pet owners afford these new high cost services?" Conversely, "what should veterinary practices do to promote these high tech procedures and attract these more valuable customers?"
Pet care financing is the solution. Veterinary practices and Animal Hospitals that are on the leading edge of offering these procedures based on new medical technology understand the need to offer financing to their customers.
Tuesday, December 21, 2010
Friday, December 3, 2010
Getting Organized to Extend Credit
This is the second in our series, "Establishing Best Practices for Extending Credit in Today's Economy".
According to a 2008 survey conducted by GfK Roper Public Affairs and Media, when faced with a medical expense over $1,000, one out of 10 people surveyed stated that they would seek a payment plan/monthly payments from the service provider to help in paying the expense. This was before the impact of the credit crisis was really felt by the general population.
Today, one can assume, if asked the same question again, that a higher percentage of people would seek payment assistance in the form of a payment plan. If your business recognizes the need to extend credit terms to your customers, you probably also realize that it would be a good idea to have a plan in order to execute successfully and avoid unnecessary repayment risk.
There are several areas to consider when getting organized to extend credit. In this blog post, we will highlight "best practices" to assist you in successfully extending credit to your customers.
Develop a Written Plan
A plan defines the goal behind offering credit terms, a roadmap for everyone to follow in executing the plan, as well as the metrics to measure its success. Putting it down on paper forces you to really think about what is involved, offers you the ability to get valuable feedback before implementing, and the ability to share it with everyone on your team. This ensure that it is properly executed.
Understand Lending and Privacy Compliance Requirements
Extending credit terms is lending and is, therefore, subject to a number of state and federal consumer lending and privacy laws and regulations. It is a best practice to seek out professional advice to understand your role and obligation regarding these laws and regulations. Topics to cover include collecting and handling personal information from applicants, making credit decisions, using a credit agreement, collecting payments, handling missed payments, and use of outside collections services.
There is a lifecycle to extending credit with many steps along the way. Minimizing risk associated with compliance, while at the same time ensuring a positive experience for your customers, requires some planning across the entire lifecycle. Automation across the entire lifecycle can greatly simplify compliance and dramatically reduce the overall risks involved extending credit successfully.
Formalize Credit Processes
Formalizing the various processes involved in extending credit aids in compliance, ensures that credit criteria are applied consistently for all applicants, and creates written documentation needed to process and enforce the credit agreement with the borrower. Specific areas to consider include the application process, the credit application and credit agreement forms, borrower communications, document retention and record storage polices, credit evaluation and approval, missed payment policies, and default resolution. Automation and written guidelines for staff to follow are best practices to achieve these objectives.
Effective Automation is the Key
When you hear or read stories about businesses that have had negative experiences with extending credit to their customers, it is often because they weren't organized and didn't apply best practices to the overall process. Unfortunately, even in cases where good procedures and policies are defined, execution using manual processes often proves time-consuming and error-prone. When staff turnover is factored into the equation consistently, applying best practices to extending credit becomes more difficult.
Effective automation of the ENTIRE lifecycle is the key to success. Supported by written policies and procedures it greatly reduces risk by simplifying compliance, enforcing best practices, eliminating manual processes, enforcing consistency, and providing business intelligence at every stage of the lifecycle and across all credit accounts. Effective automation makes it possible for even small businesses with limited staff to be highly successful extending credit to their customers.
In our next blog post for "Establishing Best Practices for Extending Credit in Today's Economy," we will explore best practices for creating new payment plans in more detail.
According to a 2008 survey conducted by GfK Roper Public Affairs and Media, when faced with a medical expense over $1,000, one out of 10 people surveyed stated that they would seek a payment plan/monthly payments from the service provider to help in paying the expense. This was before the impact of the credit crisis was really felt by the general population.
Today, one can assume, if asked the same question again, that a higher percentage of people would seek payment assistance in the form of a payment plan. If your business recognizes the need to extend credit terms to your customers, you probably also realize that it would be a good idea to have a plan in order to execute successfully and avoid unnecessary repayment risk.
There are several areas to consider when getting organized to extend credit. In this blog post, we will highlight "best practices" to assist you in successfully extending credit to your customers.
Develop a Written Plan
A plan defines the goal behind offering credit terms, a roadmap for everyone to follow in executing the plan, as well as the metrics to measure its success. Putting it down on paper forces you to really think about what is involved, offers you the ability to get valuable feedback before implementing, and the ability to share it with everyone on your team. This ensure that it is properly executed.
Understand Lending and Privacy Compliance Requirements
Extending credit terms is lending and is, therefore, subject to a number of state and federal consumer lending and privacy laws and regulations. It is a best practice to seek out professional advice to understand your role and obligation regarding these laws and regulations. Topics to cover include collecting and handling personal information from applicants, making credit decisions, using a credit agreement, collecting payments, handling missed payments, and use of outside collections services.
There is a lifecycle to extending credit with many steps along the way. Minimizing risk associated with compliance, while at the same time ensuring a positive experience for your customers, requires some planning across the entire lifecycle. Automation across the entire lifecycle can greatly simplify compliance and dramatically reduce the overall risks involved extending credit successfully.
Formalize Credit Processes
Formalizing the various processes involved in extending credit aids in compliance, ensures that credit criteria are applied consistently for all applicants, and creates written documentation needed to process and enforce the credit agreement with the borrower. Specific areas to consider include the application process, the credit application and credit agreement forms, borrower communications, document retention and record storage polices, credit evaluation and approval, missed payment policies, and default resolution. Automation and written guidelines for staff to follow are best practices to achieve these objectives.
Effective Automation is the Key
When you hear or read stories about businesses that have had negative experiences with extending credit to their customers, it is often because they weren't organized and didn't apply best practices to the overall process. Unfortunately, even in cases where good procedures and policies are defined, execution using manual processes often proves time-consuming and error-prone. When staff turnover is factored into the equation consistently, applying best practices to extending credit becomes more difficult.
Effective automation of the ENTIRE lifecycle is the key to success. Supported by written policies and procedures it greatly reduces risk by simplifying compliance, enforcing best practices, eliminating manual processes, enforcing consistency, and providing business intelligence at every stage of the lifecycle and across all credit accounts. Effective automation makes it possible for even small businesses with limited staff to be highly successful extending credit to their customers.
In our next blog post for "Establishing Best Practices for Extending Credit in Today's Economy," we will explore best practices for creating new payment plans in more detail.
Sunday, October 31, 2010
The Need for Extending Credit is More Important Than Ever
This is the first in our series, "Establishing Best Practices for Extending Credit in Today's Economy".
Successful businesses in elective healthcare, dental care, and veterinary services use customer financing to maintain and grow their sales. Like accepting different forms of payment, such as credit cards, extending credit is becoming more popular as another method to help close a sale, while enabling customers to financially secure services they would otherwise not be able to afford.
Unfortunately, given the current tighter credit standards and the increase in consumers with FICO scores under 650, access to consumer financing has become significantly limited making the financing that is available more expensive for these businesses. For example, approval rates for traditional financing through credit cards or lending institutions have seen a significant double-digit decline causing many consumers to forego non-essential elective healthcare services and creating a significant revenue decline for elective healthcare providers.
The credit crisis has also impacted many other B2C industries, such as education, legal, home improvement, luxury goods & services, and others that suffer from the lack of effective third party financing.
DIY - extend your own credit
The choice for many businesses is between offering their own payment terms or doing nothing, forgoing the much-needed revenue and crossing their fingers that the economy will improve soon.
As a result, many businesses are now turning to extending credit via internally funded payment plans as a way to close the gap and create a "win-win" for their business and their customers.
Extending credit through payment plans is hardly a new concept. For many types of businesses this is an accepted and well-understood practice that has helped them grow their sales and maintain customer loyalty. And, importantly, steady cash flow.
Many businesses that are considering a program to extend credit through offering their own payment plans have little experience in setting it up. Others, that already offer credit through payment plans struggle with manual processes that are time consuming and error-prone. For both, we recommend establishing credit practices using a "best practices" approach.
Establish a purpose for extending credit
Credit terms enable customers to focus less on prices, enhance customer relations, and have the potential to generate new sales. But before jumping in, the question needs to be asked: "Is it necessary to extend credit to maintain or increase sales?" Answering this question helps to define the purpose for an effective credit program and can establish milestones for measuring the program's success.
Extending credit is an effective way to close the financing gap and give you more control. This is especially true if approval rates have dropped or discount fees have increased from your existing third-party lender.
The same is true if your competition offers customer financing and you don’t. The availability of customer financing is an important buying criteria for many consumers, particularly for larger ticket services, and especially in today's economic climate.
Assuming the answer is "yes" for your business, you need a plan for how to extend credit effectively and efficiently. "Getting organized to extend credit," which is our next post in the blog series "Establishing Best Practices for Extending Credit in Today's Economy" will help to get you on the path to success with extending credit to your customers.
Successful businesses in elective healthcare, dental care, and veterinary services use customer financing to maintain and grow their sales. Like accepting different forms of payment, such as credit cards, extending credit is becoming more popular as another method to help close a sale, while enabling customers to financially secure services they would otherwise not be able to afford.
Unfortunately, given the current tighter credit standards and the increase in consumers with FICO scores under 650, access to consumer financing has become significantly limited making the financing that is available more expensive for these businesses. For example, approval rates for traditional financing through credit cards or lending institutions have seen a significant double-digit decline causing many consumers to forego non-essential elective healthcare services and creating a significant revenue decline for elective healthcare providers.
The credit crisis has also impacted many other B2C industries, such as education, legal, home improvement, luxury goods & services, and others that suffer from the lack of effective third party financing.
DIY - extend your own credit
The choice for many businesses is between offering their own payment terms or doing nothing, forgoing the much-needed revenue and crossing their fingers that the economy will improve soon.
As a result, many businesses are now turning to extending credit via internally funded payment plans as a way to close the gap and create a "win-win" for their business and their customers.
Extending credit through payment plans is hardly a new concept. For many types of businesses this is an accepted and well-understood practice that has helped them grow their sales and maintain customer loyalty. And, importantly, steady cash flow.
Many businesses that are considering a program to extend credit through offering their own payment plans have little experience in setting it up. Others, that already offer credit through payment plans struggle with manual processes that are time consuming and error-prone. For both, we recommend establishing credit practices using a "best practices" approach.
Establish a purpose for extending credit
Credit terms enable customers to focus less on prices, enhance customer relations, and have the potential to generate new sales. But before jumping in, the question needs to be asked: "Is it necessary to extend credit to maintain or increase sales?" Answering this question helps to define the purpose for an effective credit program and can establish milestones for measuring the program's success.
Extending credit is an effective way to close the financing gap and give you more control. This is especially true if approval rates have dropped or discount fees have increased from your existing third-party lender.
The same is true if your competition offers customer financing and you don’t. The availability of customer financing is an important buying criteria for many consumers, particularly for larger ticket services, and especially in today's economic climate.
Assuming the answer is "yes" for your business, you need a plan for how to extend credit effectively and efficiently. "Getting organized to extend credit," which is our next post in the blog series "Establishing Best Practices for Extending Credit in Today's Economy" will help to get you on the path to success with extending credit to your customers.
Wednesday, September 29, 2010
35% of the population now has a FICO score below 650
According to a blog post on Mint.com today by John Ulzheimer, President of Consumer Education of Credit.com and the author of the book “You’re Nothing But A Number", over 35% of the population in the United States now has a FICO score below 650. As stated in the post, that 650 score break is meaningful because in today’s financial services environment many lenders and insurance companies consider the +/- 650 point to be the dividing line between prime and sub-prime. What this means is more consumers are going to be denied or adversely approved (that means you’re approved for a loan, but with punishing rates or terms), and scores that are trending lower will continue to do so for many years to come.
This reinforces the fact that the market for consumer financing is very challenging and looks to remain that way for years to come. Approval rates for conventional customer financing look to remain very low and terms for those lucky enough to qualify will be expensive. What we have seen is a gradual increase in the number of subprime lenders coming into the consumer financing market to fill part of the gap being left by conventional lenders. Unfortunately, even with these two sources of external financing approval rates are still well below 50% and terms are expensive for the borrower.
ExtendCredit.com works with many conventional and subprime lenders because we complement their lending programs. For their business customers, ExtendCredit.com solves the problem of low approval rates by enabling these businesses to offer their own internally funded payment plans. Because ExtendCredit.com automates lending best practices and offers the business instant credit and fraud verification, repayment risk can be minimized while generating needed sales for the business.
In upcoming blog posts we will be doing a series on Best Practices for Extending Credit to Your Customers. In this series we will explore each best practice that a business should implement to be successful and explain how ExtendCredit.com automates many of the best practices for the business. We hope you will tune in for this informative and valuable series.
To see the original blog post on mint.com, click here.
This reinforces the fact that the market for consumer financing is very challenging and looks to remain that way for years to come. Approval rates for conventional customer financing look to remain very low and terms for those lucky enough to qualify will be expensive. What we have seen is a gradual increase in the number of subprime lenders coming into the consumer financing market to fill part of the gap being left by conventional lenders. Unfortunately, even with these two sources of external financing approval rates are still well below 50% and terms are expensive for the borrower.
ExtendCredit.com works with many conventional and subprime lenders because we complement their lending programs. For their business customers, ExtendCredit.com solves the problem of low approval rates by enabling these businesses to offer their own internally funded payment plans. Because ExtendCredit.com automates lending best practices and offers the business instant credit and fraud verification, repayment risk can be minimized while generating needed sales for the business.
In upcoming blog posts we will be doing a series on Best Practices for Extending Credit to Your Customers. In this series we will explore each best practice that a business should implement to be successful and explain how ExtendCredit.com automates many of the best practices for the business. We hope you will tune in for this informative and valuable series.
To see the original blog post on mint.com, click here.
Wednesday, September 15, 2010
Pet Care Financing During Difficult Times
The credit crisis has severely impacted many industries who rely on customer financing to drive their business and help their customers afford their services.
The Animal and Pet Care Industry is one of the industries impacted by the lack of adequate client financing. Pet insurance and conventional third-party financing are not meeting the need today. ExtendCredit.com is filling this void through it's Pet Care Payment Plan program for Veterinarians and Animal Hospitals.
To learn more, read our press release, or watch our video on YouTube.
The Animal and Pet Care Industry is one of the industries impacted by the lack of adequate client financing. Pet insurance and conventional third-party financing are not meeting the need today. ExtendCredit.com is filling this void through it's Pet Care Payment Plan program for Veterinarians and Animal Hospitals.
To learn more, read our press release, or watch our video on YouTube.
Wednesday, July 21, 2010
Close the Gap in Your Customer Financing Picture
Businesses across the United States are looking for alternatives for customer financing. Conventional financing programs are not meeting the need. Approval rates are at an all time low as only the most credit-worthy customers qualify for conventional financing. Fewer and fewer services even qualify for conventional financing. All too often, when conventional financing is available, you hear stories about customer complaints that it is really expensive. These are signs of the times. The economic crisis is still with us and the situation will not change any time soon. The harsh reality for businesses that use conventional customer financing is that business and revenues are significantly lower than in the past. So how do you close this gap and build your business and revenues back up in these challenging economic times?
Extend your own credit in the form of payment plans to your customers as a complement to conventional financing. This approach provides choices for you and your customers. If conventional financing programs are only approving 15% of customers that apply for financing, then offering your own payment plans can close that gap and increase approvals to more normal levels. If conventional financing programs will not cover certain procedures or types of transactions, then offering your own payment plans can generate sales that would otherwise be lost.
As a business owner, you see the benefit of offering your own payment plans, but you do not have the infrastructure, resources or experience to manage them. You may have even tried offering your own payment plans in the past and struggled with juggling spreadsheets and the time consuming and error-prone manual processes involved with this approach. This is where ExtendCredit.com comes into the picture.
ExtendCredit.com provides businesses with a comprehensive, easy-to-use online service that enables them to offer their own flexible, extended payment terms to qualified customers as well as easily manage those payment plans. ExtendCredit.com provides everything needed to initiate, manage, and collect on those payment plans. The fees are extremely affordable for the business and there are no long term contracts required to participate.
ExtendCredit.com is helping businesses across the United States in a variety of industries, including Healthcare practices such as Orthodontics, Cosmetic Dentistry, Cosmetic Surgery, Weight Loss, Eye Surgery, Denturists, Vein Care, Hair Restoration, Fertility and others, Veterinary Practices, Service businesses such as Automotive Repair, Home Improvement, Family Law, and other small businesses that see the value offering payment plans hold for growing their businesses in these challenging economic times.
Extend your own credit in the form of payment plans to your customers as a complement to conventional financing. This approach provides choices for you and your customers. If conventional financing programs are only approving 15% of customers that apply for financing, then offering your own payment plans can close that gap and increase approvals to more normal levels. If conventional financing programs will not cover certain procedures or types of transactions, then offering your own payment plans can generate sales that would otherwise be lost.
As a business owner, you see the benefit of offering your own payment plans, but you do not have the infrastructure, resources or experience to manage them. You may have even tried offering your own payment plans in the past and struggled with juggling spreadsheets and the time consuming and error-prone manual processes involved with this approach. This is where ExtendCredit.com comes into the picture.
ExtendCredit.com provides businesses with a comprehensive, easy-to-use online service that enables them to offer their own flexible, extended payment terms to qualified customers as well as easily manage those payment plans. ExtendCredit.com provides everything needed to initiate, manage, and collect on those payment plans. The fees are extremely affordable for the business and there are no long term contracts required to participate.
ExtendCredit.com is helping businesses across the United States in a variety of industries, including Healthcare practices such as Orthodontics, Cosmetic Dentistry, Cosmetic Surgery, Weight Loss, Eye Surgery, Denturists, Vein Care, Hair Restoration, Fertility and others, Veterinary Practices, Service businesses such as Automotive Repair, Home Improvement, Family Law, and other small businesses that see the value offering payment plans hold for growing their businesses in these challenging economic times.
Who knew! Dentists want to offer payment plans
We recently exhibited at the Pacific Northwest Dental Conference in Seattle. While we were a little last minute in deciding to exhibit, the show was a great success for ExtendCredit.com. Throughout the show, we had more booth traffic than our hard working team could handle. A lot of follow up appointments with dentists, medical billers, and potential resellers will keep our local sales team in the Seattle area hopping for some time to come.
Using payment plans for managing accounts receivable was the hot topic. In today's credit challenged economy, more and more patients are struggling to pay their bills. All too often, medical bills get pushed to the bottom of the pile. Accounts receivable balances at dental practices are getting larger and aging longer.
Offering payment plan options to many of these patients with outstanding balances is good business. With ExtendCredit.com, the dental practice decides which accounts qualify for payment plans and how the payment plans should work. The dental practice controls whether credit checks are performed, and what interest rate and payment term to set.
ExtendCredit works with the dental practice to design a "best practices" approach to communicate the offer to the patients and get them signed up. Once signed up, ExtendCredit's automated system takes over for collecting payments from the patients and handling any missed payment situations. The dental practice has real-time access to patient payment activity to stay on top of weekly cash flow from the payment plans. Using ExtendCredit.com, offering payment plans as a cash flow strategy for existing accounts receivable is simple, highly automated, and effective.
To learn more about how ExtendCredit.com can help you manage your accounts receivable better call us today at 888-364-2808, or email us at sales@extendcredit.com. You'll be glad you did!
Using payment plans for managing accounts receivable was the hot topic. In today's credit challenged economy, more and more patients are struggling to pay their bills. All too often, medical bills get pushed to the bottom of the pile. Accounts receivable balances at dental practices are getting larger and aging longer.
Offering payment plan options to many of these patients with outstanding balances is good business. With ExtendCredit.com, the dental practice decides which accounts qualify for payment plans and how the payment plans should work. The dental practice controls whether credit checks are performed, and what interest rate and payment term to set.
ExtendCredit works with the dental practice to design a "best practices" approach to communicate the offer to the patients and get them signed up. Once signed up, ExtendCredit's automated system takes over for collecting payments from the patients and handling any missed payment situations. The dental practice has real-time access to patient payment activity to stay on top of weekly cash flow from the payment plans. Using ExtendCredit.com, offering payment plans as a cash flow strategy for existing accounts receivable is simple, highly automated, and effective.
To learn more about how ExtendCredit.com can help you manage your accounts receivable better call us today at 888-364-2808, or email us at sales@extendcredit.com. You'll be glad you did!
Sunday, June 13, 2010
We are exhibiting at the Pacific Northwest Dental Conference June 17-18th - Booth 215
If you are planning on attending PNDC in Seattle this week, make sure to stop by our booth (# 215) to say hi and learn more about the great services ExtendCredit.com offers Dentists and Medical Billers.
Sponsored by the Washington State Dental Association (WSDA), the Pacific Northwest Dental Conference (PNDC) offers two days of continuing dental education with over 50 nationally-renowned speakers and a dental trade show of more than 350 exhibits. With almost 9,000 attendees, the PNDC is the largest gathering of dental professionals in Washington.
Contact sales@extendcredit.com to arrange a time to meet while at the show or to learn more about ExtendCredit.com.
Sponsored by the Washington State Dental Association (WSDA), the Pacific Northwest Dental Conference (PNDC) offers two days of continuing dental education with over 50 nationally-renowned speakers and a dental trade show of more than 350 exhibits. With almost 9,000 attendees, the PNDC is the largest gathering of dental professionals in Washington.
Contact sales@extendcredit.com to arrange a time to meet while at the show or to learn more about ExtendCredit.com.
Thursday, May 27, 2010
Service Launch
We are in the private launch phase of the ExtendCredit.com service. Initial market demand and feedback has been amazingly positive and exceeded our expectations. It looks like we have hit upon an idea that the market really wants.
The problem we are addressing is - Consumer access to affordable credit is very limited and looks like it will stay that way for years to come. As a result, businesses throughout the country and across many different industries are forgoing material and essential revenues from customers who need financing in order to pay for needed goods and services.
The solution we are providing is - ExtendCredit.com provides businesses with a comprehensive, easy-to-use service that enables them to offer their own flexible, extended payment terms to qualified customers as well as easily manage the entire process for those credit accounts.
Our customers are using the service to offer new credit accounts to their customers, and also, using the service to offer payment plans to existing accounts receivable customers.
To learn more, visit our website at www.extendcredit.com or call (888) 364-2808.
ExtendCredit.com is not a lender, rather we provide a web-based platform for businesses to offer their own internally-funded extended credit terms and short-term financing for their goods and services.
The problem we are addressing is - Consumer access to affordable credit is very limited and looks like it will stay that way for years to come. As a result, businesses throughout the country and across many different industries are forgoing material and essential revenues from customers who need financing in order to pay for needed goods and services.
The solution we are providing is - ExtendCredit.com provides businesses with a comprehensive, easy-to-use service that enables them to offer their own flexible, extended payment terms to qualified customers as well as easily manage the entire process for those credit accounts.
Our customers are using the service to offer new credit accounts to their customers, and also, using the service to offer payment plans to existing accounts receivable customers.
To learn more, visit our website at www.extendcredit.com or call (888) 364-2808.
ExtendCredit.com is not a lender, rather we provide a web-based platform for businesses to offer their own internally-funded extended credit terms and short-term financing for their goods and services.
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