Choosing a Financing Provider: What to Consider

Offering financing is the easiest and fastest way to grow your business.

"Financing has the ability to solve several problems that a lot of businesses face. Problems such as accounts receivable, lack of down payment availability and increasing closing numbers, resulting in increased business without increasing the cost of acquisition. Financing also builds value, trust, and credibility in the company from the consumer."
Jeff Kay, Head of Sales - East Coast Roofing, Siding & Windows

For most home improvement businesses, the question isn't whether to offer financing, but which provider to use. The truth is, not suggesting it can cost you sales. That’s because today’s consumers expect your offer payment options. What’s more, waiting for your customer to secure their financing is risky. They can change their mind, or decide to work with a competitor who offers payment options during their sales presentation.

Here are some essential items to consider when comparing consumer financing providers.

Is joining the program free and easy?

Your provider should have a reasonably simple application form. Of course, they need to know some necessary information about your business, like how long you’ve been around, your annual sales, bank details, etc. There shouldn't be upfront charges or fees to join the program and training should be baked into the program.

Is there a wide range of financing plans available?

You may offer only a few carefully selected lending options to your customers. However, the more plans you have to choose from, the more closely you can customize your finance program to fit your business, your products, and your customers. For example, you may wish to offer 2 or 3 Promotional Plans - like No Interest (with or without payments) if paid in full within the promo period¹– along with several others of varying terms. The bottom line is: If your provider doesn’t offer it, neither can you. So, offering a broad range is essential.

Are the loan application and payment processes fast, easy and paperless?

Find a provider with tools and an infrastructure that simplifies your ability to offer payment options to your customers. For example:

• Does the provider offer a mobile app?
• Is there an account portal for you and one for your customers?
• Is funding truly paperless? Your customers shouldn't have to provide anything on paper to apply - nor should you just to get paid.

Make financing an integral part of your in-home sales presentation. Exploring payment options, selecting the appropriate terms, applying and accepting the offer should be the work of a few moments - not a major undertaking. 

Can customers review their account & make payments the way they prefer?

Keep in mind, your customers will become customers of your financing provider. They should offer customers the ability to:

• View their account details online
• Set up Autopay or make single payments
• Pay by telephone or by mail

Choose a provider that makes account and payment services available when, where and how the customer prefers them.

Is staged funding available?

Depending on your business, the ability to accept a down payment may be critical to your cash flow. Customers should be able to make that payment from their loan balance if they don't want to make a cash down payment. The finance provider is likely to have some limits on the amount homeowners can use as a down payment, but staged funding should be an option.

Is the program designed to help you sell?

When you choose a provider, look for:

• Credit limits that support the types of projects you do
• Promotional financing plans that help you tailor your offer to each customer’s needs
• The ability to approve customers for more whenever possible - for example, a $10,000 loan application may be approved for $15,000. This gives you the opportunity to sell additional products and services.
• A payment estimator to help you explore price points and loan terms
• The ability to brand your company on the provider's mobile app

These options can catapult your customer's sales experience and help you prepare  “good, better, best” presentations with lending options to suit their budget. 

Do they provide substantial training, service, and support?

Once you've settled on a provider, your sales and admin staff will need training,  even if the loan program is simple to use. Support should go beyond initial training, however. Make sure the provider you choose has experts on staff to answer questions and help you learn to use affordable payment options to close more and bigger sales.