Original reporting· furniture
Building a 2026 Furniture-Financing Stack That Actually Closes Sales
Three tiers, four KPIs, and the merchant discount rate math you actually need.
Most independent furniture retailers are running a 2018 financing stack against 2026 credit conditions. This playbook lays out a modern three-tier stack — prime, near-prime, lease-to-own — with the four KPIs you should be tracking weekly and the back-of-envelope math that determines whether adding a tier is accretive to gross margin or just inflating top-line.
# Building a 2026 Furniture-Financing Stack
Furniture is the original retail-financing category, and the stack most independents run was designed for 2018 credit conditions. Here's what a modern stack looks like and how to evaluate it.
## The three-tier stack
**Tier 1 — Prime.** Synchrony or Wells Fargo. Deferred interest, 12–18 months. Approves 40–55% of applicants.
**Tier 2 — Near-prime.** Genesis, Concora, Citizens. Slightly higher APR, no deferred-interest gotcha. Approves another 15–25 percentage points of the funnel.
**Tier 3 — Lease-to-own.** Snap, Acima, Progressive. Non-credit lease structure. Captures most of the remaining tail.
Full stack approval: 75–90 percent of walk-ins.
## The four KPIs
1. **Approval rate** — applications approved at any tier ÷ total applications.
2. **Capture rate** — approved customers who actually buy ÷ approved customers. Track per-tier; LTO capture is typically lower.
3. **Ticket lift** — average ticket on financed orders ÷ average ticket on cash orders.
4. **MDR drag** — blended merchant discount rate across all financed volume.
## The math
Adding a tier is accretive when:
(incremental approved sales) × (gross margin %) > (incremental MDR cost)
For most furniture retailers, a near-prime tier is accretive at any reasonable margin. LTO is accretive when your gross margin is above ~35% — which is most of the category.
Original reporting by the Financing Your Way editorial staff. No external source.