What are we seeing going into 2011?

Not much changed in 2010 compared to 2009 with respect to the major banks' consumer financing programs. Banks are still limiting access to these programs for retailers and service providers. For larger companies and industries that have been able to hold onto their programs, they have seen a continued tightening of approval criteria for applying customers just as they did last year.

Fortunately 2010 brought a resurgence of alternative finance companies willing to step in and take advantage of a large business opportunity left open by the major banks and we believe the trend will continue in 2011. While these programs can be more expensive to the dealer due to the risk associated with today's economy, they are just as well capitalized as the big banks' programs of previous years and can offer just as many promotional programs and features (sometimes more).

What we are also seeing is a change in the attitude of retailers and service providers who seem more open now to doing business a little differently than before which allows companies like ours to get really creative in helping clients recapture some of the lost revenue they have experienced by not having adequate financing options in place for their consumers.

East Bridge Funding looks forward to 2011 as we will begin utilizing brand new capital sources which will give us the ability to create much more attractive terms for both the dealer and the customer. We wish all of our funding sources and clients a fantastic year and is excited to see who we can help next.

Consumer Finance Programs in the Current Economy

With the credit markets tightening up everywhere, businesses are finding it difficult get customers approved for financing through their current consumer finance programs. Many of the big banks that are players in the retail finance industry are also players in the mortgage industry as well as other sectors that are not performing to par. This has forced them to tighten up on credit and take a much more conservative approach when deciding who to approve and in what markets they want to continue to offer financing in. This is bad news for businesses as less approvals means less sales and revenue and for many businesses no financing means NO REVENUE.

Fortunately there are solutions to this problem. This situation has created an excellent opportunity for smaller finance companies as well as indirect lenders and other debt buyers to step in and fill the void. Typically these institutions find it difficult to compete with the big boys on pricing so they typically take on the role of a 2nd look option for a business's customers. Many of these small finance companies and debt buyers aren't regulated the same ways as the big banks like GE, Citi, Wells Fargo, Chase, etc so they can remain versatile and can approve a wide arrange of credits even in tough economic times.

Using smaller finance companies and debt buyers will solve a businesses approval rate problems and can provide great consumer finance programs but not without a price. These institutions have a higher cost of funds then the big banks and usually higher overhead so the programs are more expensive in terms of discounts. However, it is far less expensive then having a customer walk out the door because you can't get the financing for them.

Our office has been flooded with calls from businesses experiencing consumer financing trouble, but fortunately we are able to help them. No one knows how long this credit crunch will last. The businesses that survive will be those who find acceptable alternative finance solutions until the big banks bounce back.

For further information about these alternative financing sources visit www.eastbridgefunding.com.