I am the owner of a retail petshop. Many of my customers would love to
purchase animals that, due to their selling-price, are simply beyond
their financial means, in a "lump sum payment". If I was able to "hook
up" with somekind of lender where my customers would fill out a credit
application and be approved on the spot (in which case they would make
monthly payments to the lender instead of having to dish out a large
lump sum) the purchase would become far more affordable for them.

I would like to know exactly WHERE I should go, and HOW I should
proceed, to establish an "account" or "relationship" with a lender or
bank or other institution, that performs this type of service (and
that would extend such service to my business - a pet shop) so that I
can allow my customers the option of credit purchases, while
personally getting paid in one lump sum.

Please consider that:

1. I am a pet shop owner, these purchases would include animals,
accessories, and the like.

2. I am situated and operating in Brooklyn, New York.

3. I do not have any extensive credit history.

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Clarification of Question by urbanjew-ga on 03 Feb 2005 22:10 PST

- Please NO PAYPAL related solutions -

You can package receivables and sell them in bulk to a third party.
The third party will pay you X% of the face value of the loans and
take care of collecting the balance. You receive all of the cash
upfront and don't have to worry about the collections. But the third
party firm will only buy the receivables at a substantial discount, so
you'll have to look at how this discount eats into your store's profit
margins.

The key question is this: will you gain enough new business (higher
volume) to make up for lower margins. Conceptually, it's the same as
marking down your prices to move more pets.

From your posting, it sounds like your clients are unable to use
credit cards to make the purchases in question (because a credit card
company performs the same service that you're looking for... you get
cash now and someone else worries about collecting on the loan). This
fact leads me to believe that the financed purchases will be relativly
low dollar amounts, which means you'd have to bundle a lot of them
together to make it worth anyone's while to buy from you.
Additionally, people unable to get credit cards have terrible credit,
so the third party would likely demand a very high markdown before
buying your receivables.

All in all, it sounds like you won't be able to do what you're looking for.

Your first paragraph seems to be right on the money (no pun intended).
Perhaps I've been looking at this too much from the customer's point
of view and as such, have been oblivious to the "behind the scenes"
skeleton of the transaction. Is this how "financing" works in the
retail world? Is the "monthly payment" option nothing more then mere
simplified "packaging" when in reality the receivable is transferred
over to a third-party at the time of sale?

Animals sold in our store range from US $1000.00 to US $1,500.00
retail cost. Imho, more then enough to entice anyone in the business
of buying receivables. We are currently setting up for Visa/MC
merchant accounts but that is really besides the point. Contrary to
your stated assumptions, we are directing our marketing efforts to
target specifically those individuals with good credit. Accepting
credit cards is well.. generic to say the least, and hardly
constitutes any competitive edge. People, in my experience, are
generally reluctant to place costly purchases on their credit cards,
knowing this would inhibit further spending until the balances were
either paid off or almost. It is precisely this obstacle that my
question seeks to circumvent. For some odd reason, people tend to be
more liberal with expenditures that do not bite into their "direct"
source of monthly cash flow - this being the element I'm seeking to
capitalize on.

Additionally, it should be noted that marketing strategies in the pet
industry are at best, in their infancy. Coupled with other marketing
points, the availabliity of a viable "financing option", for eligible
applicants, would - as you stated, both increase sales by a
significant margin and provide an element of security by way of
ensuring solid sales projections. Taken together, these would
certainly justify absorbing a reasonable "discount" on the sale of the
receivable to any third-party.

For the record: to the best of my knowledge, the sale of receivables
is most common in the delinquent accounts industry (collections, etc).
Given that, the "discount" is often significant and not something
viable for day to day business. I am assuming this isn't what you were
refering to.

Thanks for your interest, I certainly look forward to hearing your
thoughts, and would by all means love it if you could provide a
workable solution given the details above. Please feel free to request
additional information as you require.