Paying for high cost items using finance options is nothing new, but often you’re at the whim of the retailer’s offers and deals and it’s hard to find such options at smaller shops. That may not be the case in the future though, as startup Divido wants to provide financing at all levels of retail.
Although a relatively new UK business, Divido just secured £2.5 million in funding, following an initial £200,000 grant from the British government’s innovation agency (thanks TechCrunch). It’s hoped that by bringing competition to various sectors of the retail market, Divido may make it easier for smaller business to compete on price with larger enterprises.
The reason Divido is a potential game changer, is more than just the provision of finance in stores that don’t have their own system, is because it pays the retailers up front, while only charging the consumers the monthly repayment. It also offers competition in the financing space, asking companies to compete for the customer’s contract, thereby securing better rates for the consumer as well.
This means that there is less risk for the financing company, less risk for the retailer and a more affordable deal for the customer, which should make them more likely to take it out in the first place.
This sort of financing option has the potential to level the playing field in a number of industries if it catches on, potentially leading to much better services and products for everyone.
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KitGuru Says: Are there any things you might purchase if you could secure a financing deal that was a little more favourable?