by Shoppers of all income levels are increasingly seeking financing
HIGH POINT — In home furnishings retail, long-term financing options have been prevalent for quite some time, with retailers offering repayment plans up to several years in length. But who is seeking financing — and how — is shifting. In today’s competitive marketplace, financing is no longer a nice-to-have but a must in order to capture shoppers.
“Furniture is often the third-largest purchase for consumers after their home and vehicle, and financing plays a critical role in increasing buying power,” said Chris Guido, senior director, client partnerships, retail at financial services company Bread Financial, based in Columbus, Ohio.
Henry Chionuma, senior vice president of business development at Atlanta-based financial technology company Atlanticus, says that for the past five years, the furniture industry has been subject to one obstacle after another: supply chain disruptions from Covid-19, inventory shortages and tariffs.
“There’s always been something that has continued to disrupt the furniture industry, but they continue to press on and evolve,” said Chionuma. “I think what you’re going to see is that as long as the furniture industry continues to offer customers access to finance, we’re going to see a steady amount of sales.”
With the advent of buy now, pay later platforms like Klarna and JPMorgan Chase’s Pay in 4, today’s consumers not only expect flexibility but an array of easily accessible options. According to a Morgan Stanley AlphaWise survey from April 2025, “More than a quarter of U.S. consumers have used ‘buy now, pay later’ to finance purchases.
“Deferred payments and breaking payments is king right now,” said Matthew Dishman, president and CEO of Charlottesville, Virginia-based financial services provider LendPro.
While those platforms might not be ideal for all purchases, an analysis from LendPro suggests that these programs have shaped consumer expectations by normalizing fast, frictionless financing.
But short-term plans are only part of a winning strategy. According to Guido, retailers who only promote short-term plans risk alienating high-spending customers who desire greater flexibility, but those who only have long-term plans may be stretching payments too far for those purchasing only a few pieces of furniture.
“By tailoring financing solutions to align with consumer preferences and purchase sizes, retailers can empower shoppers to create the homes they desire while staying on budget,” Guido said.
For Black Friday, some retailers used financing as their sole promotional hook. That was the case for Old Cannery Furniture Warehouse in Sumner, Washington, which promoted long-term financing on purchases over $2,998, in lieu of discounted merchandise or a blanket percentage off.
LendPro noted that for Black Friday and Cyber Monday, the best-performing retailers made financing visible early, offered approval amounts aligned with typical purchase sizes, and multiple financing paths through a single application experience.
“Financing has shifted from a payment tool to shopping power,” Dishman said.
Analysis from LendPro said that embedded pre-qualification outperformed checkout-only financing. Consumers were “increasingly engaged with financing before building a cart or visiting a store, using approval amounts to guide product selection and set realistic expectations.” LendPro also found that financing introduced only at checkout resulted in higher incidences of cart abandonment when approval amounts did not match shoppers’ expectations.
“If you’re doing financing at checkout, sometimes your credit limit is $1,500 above what you wanted to spend and the merchant’s not getting that,” said Derek Smith, chief financial officer of LendPro. “And sometimes it’s $1,500 below, and the customer is walking out the door. So the real trend is to let customers know what their spending power is before they shop.”
Another notable trend is the demographic shift in those who are applying for financing. An analysis by Mechanicsburg, Pennsylvania-based financing software company Versatile Credit, noted that the most pronounced shifts during the Black Friday and Cyber Monday period was the emergence of financially strong consumers expanding their credit utilization.
The report noted: “This group, whose same-store applications were up by 12% year-over-year, also saw the highest jump in average applicant income (8%), now exceeding $80K. This shows that even high-earning consumers are actively seeking the value and savings provided by promotional financing, demonstrating that these offers are a powerful and effective means of driving purchase volume across the entire credit spectrum.”
Guido agreed. “Interestingly, affluent consumers lead in utilizing financing, not out of necessity, but as a strategic tool to manage cash flow and maximize value. They gravitate toward longer-term plans, especially for higher-ticket purchases, while smaller purchases often align better with shorter-term options. This highlights the importance of offering a variety of financing plans — short, mid- and long term — to meet the diverse needs of all consumers.” Guido predicts that as furniture costs continue to rise, there will be an even greater demand.
At LendPro, Dishman has observed that right now, there is a roughly equal number of applications among various types of borrowers who are seeking prime to subprime options. “I just think it’s a shortage of cash and inflation across the land,” he said.
Looking ahead, Dishman forecasts it will become even more important for retailers to offer clear, competitive financing options because of the increasing adoption of agentic artificial intelligence. Dishman shared that LendPro’s online applications have tripled, something he attributes to agentic AI. According to LendPro, when shopping online, consumers increasingly asked which retailers could support both the purchase and their credit profile, rather than searching only for a product.
It’s clear that consumers are willing to make purchases, but retailers must remain competitive with diverse financing options.
“With the feds lowering the rates, it gives people the courage to sell their home, move into something different, to upgrade or downsize and they’re going to need furniture,” Chionuma said. “I think that’s where we believe that there’s going to be improvement in sales. But it’s going to be dependent on what offerings the furniture merchants are going to present to that customer.”
