The first step is to look for financing companies that have experience with providing credit to businesses in your industry. In your case, you will want financing companies that have extensive experience in construction. These companies understand the risks & business models of customers purchasing customized construction products.
The next step is to search online, review financing trade publications, Better Business Bureau (BBB) reports and find out which financing companies your competitors are using for their own offering. After doing a search on your own, then consult with third parties that are experienced experts in your field for additional insight.
Once you have a list of 5 to 10 companies, the next step is to start contacting the financing companies. Once in contact, I would ask them at least the following questions about their business:
1. How long have you been in business?
2. How many partners, customers and employees do you have?
3. Who are your competitors and how is your offering different, better?
4. Can you describe your customer screening process?
5. What risks are there for your customers that may cause a breach in the financing agreement?
6. What happens when the customer breaches the financing agreement?
7. Can your company offer any favorable terms to our customers?
8. Do you have any partners and customers that we can speak to for third party references?
Be sure to take copious notes to better compare companies after all the calls are completed. Then, schedule a meeting or two with the top three companies based on your own assessment. You will get a feeling for which company or companies you want to partner with after the meetings.
I hope you find this information helpful. Good luck with sourcing financing companies for your customers.
Ryan Himmel, CPA and registered securities analyst, is the founder and CEO of BIDaWIZ.com, a professional network for small businesses and entrepreneurs to obtain trusted advice and services from a team of CPAs, Enrolled Agents, Financial Planners & Tax Attorneys. His team provides answers to the many finance and tax questions that small businesses encounter every day. Ryan has been quoted in The Wall Street Journal, Forbes, Fox Business and Crain's New York, among other publications. Ryan also regularly contributes to the community with his finance and tax blog.