How the Financing Works

Benefits to the Constomer

ARC90 is essentially a credit bureau for short term lending. It's designed to facilitate consumer purchases up to a year in length. It accomplishes this by examining recent account activity associated with income and day to day living. We use over 30 parameters ranging from overall economic conditions to the customer's own level of responsibility to create a best fit for a customer without looking at the major credit agencies. We don't collect a social security number and we don't do a hard or soft credit pull.

This isn't a no credit check program, rent to own, or one of the many variations meant to gouge a consumer who may have less than an ideal big 3 credit rating. It's not for people who don't pay their bills either. The 3 major bureaus have 7 or more years worth of history which is fine for loans extending over long durations. In our opinion ARC90 is an accurate alternative for shorter periods.

ARC90 looks at the last few months of bank/employment activity and makes a fair assessment of the individual's financial position. Technically we don't charge the customer interest. There is a one time per sale ARC fee of $35.00 assessed. The merchant pays a discount rate to guarantee the payments. This discount is usually added to the sale amount. This is done automatically during the sale process with 'add plan fee' set to YES while creating the sale. The store is charging the customer interest when it's added in. However, most consumers are thrilled to have the fixed low rate we provide the store. It beats most credit cards and it's a lot better than any rent to own program we're aware of.

The rate we charge the store is based on the duration of the payment plan. Three and six months is 9%. Nine months is 12% and 15% is for a year. These rates are not for 'best case' customers. Everyone that's approved gets these rates. In addition, if the customer pays off their balance within the first 90 days we waive the discount entirely. If it's over 90 days all future interest is waived. No other fees are added in to get this benefit.

Benefits to the Merchant

Thus far the benefits explained mostly affect the customer. A low rate, early pay off without fees, and a fair rating of their financial strength. Although we provide these benefits it still needs to appeal to the store owner. How is that accomplished? A lower rate is a huge benefit. Compare our low rates to the high effective interest rates charged by the leasing companies.

If a person is qualified for a $1000.00 purchase and the lease company is charging 80% the customer is going to make around $1800.00 in payments. For the same $1800.00 in payments they would qualify for about a $1550.00 purchase with ARC90. The merchant can sell more items for the same payments. Looking at the below figures and tables it becomes crystal clear. These illustrate a typical rent to own lease where the customer is paying 80% over the price of the item to rent it for a year. In all cases it's assumed the payments are made for the entire year without any early pay off. The figures given are based on data at the time and using the the same requirements of no nsf activity, a primary bank account with consistent activity, and steady employment. A safe customer with no issues.

If pie charts don't explain it well enough maybe this will. A dollar for dollar side by side comparison between ARC90 at 15% and a typical 80% rent to own lease for a year.

The purchase amount a customer's monthly income will qualify for.
It's what the merchant can sell.

The lease data was pulled from a publically available chart.
The ARC90 data was created by using a customer and adjusting the income
to match what's called out in the chart. TX was used since it's a middle of
the road income state. The lease chart stated these weren't guaranteed amounts.
In both cases it's a year long term with an ideal customer.

The cost to a customer over a year term for the same 80% lease versus ARC90.
This assumes the known at the time $40.00 lease fee and $35.00
arc fee and no other fees beyond the rate charged.

Looking at the two charts it's clear the customer and merchant are each getting
progressively taken advantage of in a lease. ARC90 is a better option for both.