Financing For Home Improvement Contractors. Research indicates that more than 50 percent of all home improvement projects over $5,000 require funding, according to the Certified Contractors Network. When households experience a home emergency, such as a leaking bathroom, burst pipes or a broken heater in February, the demand for immediate, big-ticket repairs may make cash payments a serious obstacle. “People need an immediate repair,” explains Alberto Caballero, president at AC Fast Solutions at Florida. “Very few have the ability to pay money for the complete service needed.” Bearing that in mind, offering financing is the best way for contractors to boost their earnings stream.
When used as part of a sales and marketing plan, making more funding options available is a simple method to help bring more clients, build a loyal customer base and obtain more business from an untapped segment. If you don’t currently offer financing, or you’re experiencing too many reductions with your lender, maybe you should consider the two-tiered financing model described below.
The most successful builders take a tiered approach, including financial service providers who provide prime financing options, as well as a provider that eases second look financing. Financing For Home Improvement Contractors.
Prime financing suppliers accept clients with good to excellent credit scores, and typically offer you fantastic, low-payment terms and blessings.
However, as soon as a client can’t qualify for credit by a prime creditor, another look funding supplier can help to save the sale and receive the client the home improvement service they need. This is very valuable because approximately half of the American population have credit scores which range from “fair” to “good,” meaning a large segment of potential customers could be left out. While others have a fantastic credit score and become approved by a primary creditor, when many companies have clients with less-than-ideal credit, that is if they offer instant look funding. In Fortiva Retail Credit, as an example, we’ve been able to take 25 percent to 50 percent of consumers who had initially been declined by a prime lender. This is only because we could offer financing to clients using FICO scores as low as 550. We use an underwriting system that allows us to look at data other than only a FICO score to gain better insight into a individual’s ability to pay — rather than condemning them due to a few credit hiccups. “Some customers have great credit scores and get approved by my primary creditor, but many of my customers do not have good credit,” Caballero explains. “That’s when we offer Fortiva.”
Letting them know that you offer multiple financing options is a fantastic way to increase long-term customer loyalty
To offer you a concrete instance of a tiered financing program at work, let us consider a family whose kitchen cabinets have resigned to their last days. Their neighborhood hardware store is offering a great low-interest, zero cash down deal for cabinets, complete with setup. But upon applying for the in-store credit, they find that they don’t qualify in large part due to hits to their credit suffered during the downturn. To help save the sale, the salesman proposes that they employ to the store’s second look alternative, and they’re approved within 10 seconds because of Fortiva Retail Credit’s paperless, “instant decisioning” program process.
The advantage of getting both prime and second appearance funding is having more to offer to a wider customer base. Prime financing suppliers can offer deals that are great to entice customers to the doorway, yet if they fall a customer, a fantastic second look funding option will nonetheless accept many of those declined. Essentially, this saves sales that would have been missing.
If a client needs a home improvement repair or renovation, letting them know that you offer multiple financing options is a great way to boost long-term customer loyalty. Knowing there’s a monthly payment option available for larger ticket development projects like kitchens and baths can help lower stress around overall sticker cost. Homeowners can then concentrate more on keeping good care of their home repairs to guarantee modest problems do not snowball into much larger ones. This helps to improve their purchasing experience with your organization. It also can help you to close the deal quicker and initiate the project sooner because the approval is currently set up. The outcome is a happy, loyal customer who’ll seek you out for prospective jobs and refer you to family members and friends who might have a similar need. Financing For Home Improvement Contractors
The bottom line is that supplying multiple financing options provides an easy way to place your home improvement business up for significant development. Should you employ low-income workers, financing also helps them earn more money, thus reducing turnover expense while creating higher job satisfaction. All in all, it is an easy way to add the Ideal numbers to your topline with nominal effort towards execution. Financing For Home Improvement Contractors