In asset finance, vendor finance is where a supplier offers finance options to its own customers at the point of sale, usually through a funder or broker it works with. The customer buys the machine, vehicle or equipment and arranges the funding in the same conversation, rather than going away to organise it separately.
For the supplier the appeal is straightforward: a customer who can spread the cost is more likely to proceed, and to proceed sooner. For the customer it is convenience, though convenience is not the same as best value — it is always worth knowing whether the option in front of you is the only one available.
The finance itself works as normal asset finance. There will be an agreement with a lender, a term, a total cost of credit, and consequences for missing payments, including the possibility of the asset being recovered. Whoever introduces the deal, the credit agreement is between the customer and the lender.
Confusingly, the same term means something different in business sales, where vendor finance describes a seller accepting part of the purchase price over time. Check which sense is meant.
CW Asset Finance works with suppliers who want to offer finance alongside their products. We are an independent credit broker with a panel of more than 60 lenders, and we are paid by the lender rather than by the customer. We cannot approve anything ourselves — all decisions rest with the lender.