What is Vendor Financing and How Does it Work?
Vendor financing (aka customer financing) is when a seller offers a customer alternative payment options to facilitate a sale.
In today’s technology market, vendor financing has become complex. You sell solutions as a subscription, service, or perpetual license and include components like hardware and implementation services in the final price. This means modern programs must be highly customizable so you can offer deferred or tiered payment structures while continuing to meet your own sales goals.
Vendor financing is a key component of every sales enablement program. It can be set up and managed internally or outsourced to a provider who has access to multiple funding sources and expertise in financial and technology markets.
What Are the Benefits of TFP’s Vendor Finance Programs for Technology Providers?
Our team has been working with technology providers and global funding institutions for over 25 years. We can design, implement, and manage a custom program that aligns with your corporate objectives and sales models. This program will become an integral part of your sales enablement effort and will be woven into your value engineering initiatives and customer facing proposals. You will have oversight and control without the fixed headcount and risk.
We specialize in medium ($100k+) and large ($1M+) multi-year deals or platform solutions. Our team builds creative deal structures that support a win-win for you and your customers such as:
- Upfront volume purchases based on forecasted need vs. current year budget
- Monetization of multi-year subscriptions to match revenue recognition rules
- Mapping payments to receipt of business value, usage, or multi-year budgets
- Leveraging maintenance or subscription renewals to grow and expand technology footprints
- Resolving license compliance issues with buyer-friendly acquisition options
We provide strategic vision and tactical field level support. In an ever-changing financial environment, we evaluate trends and manage your funding portfolio to ensure a smooth, interruption-free sales process. We work with your field sales team to identify and cultivate cross-sell and upsell opportunities while addressing financial hurdles. This allows us to propose payment options that accelerate deals, maximize revenue, and protect your margin.
How to Start a Vendor Finance Program
We offer a turnkey vendor finance program designed for immediate impact. We can manage the integration into your deal desk, legal, revenue recognition, and sales operations to reduce sales friction and drive more, bigger, and faster deals. Contact us to get your vendor finance program started today.