What do you guys think of this... - Contractor Talk - Professional Construction and Remodeling Forum

HUDSONVALLEYEXT · 08-14-2007, 04:10 PM

I saw a company I never heard of in the local Val-Pak thing. They are some franchise painting company They offer no money down take up to 4 months to pay.

This gave me the idea of offering in house financing on small jobs under $1k. Do you guys think this would work or would we get screwed? I think a lot of people would get projects done knowing that they can spread the payment out instead of never getting all the money together to get it done.

Any comments...

mdshunk · 08-14-2007, 04:15 PM

My gut feeling tells me that people that can't scrape up a grand may also fall into the group of people who aren't credit worthy. I'm not so sure I'd go out of my way to extend credit to this population.

You might save this as the last tool in your toolkit to try to close certain sales, however, and not necessarily advertise the fact that you offer this.

rws · 08-14-2007, 05:03 PM

I agree with mdshunk.You live in one of the wealthiest countys in the U.S.Why not market to the areas where people have the money?

Brian · 08-14-2007, 05:51 PM

Years ago I made an agreement with my banker. He wouldn't go into the house painting business and I wouldn't go into the finance business.

I think it's a horrible idea to do in house. If you want to offer financing, hook up with a pro. Or better yet, take credit cards.

Brian Phillips

mdshunk · 08-14-2007, 05:57 PM

I can see you pulling this out to close a sale every once in a blue moon. If they really want you to do some painting, but they just had to bury Aunt Sally, the dog had a big vet bill, kid wrecked the car, and Dad broke his leg... then you might give it a go. Something like, "If I could figure out a way to paint your house and you didn't have to pay me to 3 months, could we do business tonight?". Something along those lines. People who otherwise seem credit worthy, like your work, but just don't have it handy due to unusual circumstances. Maybe that's a bad idea too, but it's the only reason I can think of to take on a house account.

Workaholic · 08-14-2007, 06:44 PM

Quote:

Originally Posted by mdshunk

My gut feeling tells me that people that can't scrape up a grand may also fall into the group of people who aren't credit worthy. I'm not so sure I'd go out of my way to extend credit to this population.

You might save this as the last tool in your toolkit to try to close certain sales, however, and not necessarily advertise the fact that you offer this.

I agree with mdshunk, i would try taking credit cards, offer paypal, and maybe save this for a once or twice a year thing.

BMAN · 08-14-2007, 07:09 PM

I made an arrangement with my banker here. I hand out his cards to people who are looking to get finanaced and he gives out my name to people who come in for home improvement loans.

Celtic · 08-14-2007, 07:35 PM

Quote:

Originally Posted by HUDSONVALLEYEXT

This gave me the idea of offering in house financing on small jobs under $1k.

Your phone will be ringing off the hook ...unfortunately it will be every wanna-be HO (aka tenant) looking for someone to paint their apartment so they don't lose their deposit or the same looking to make it more "homey" for them, etc.

HUDSONVALLEYEXT · 08-15-2007, 07:58 PM

This in house credit thing would be targeted to upscale areas via direct mail.

daArch · 08-15-2007, 09:52 PM

Quote:

This in house credit thing would be targeted to upscale areas via direct mail.

Do upscale areas really NEED the credit thing ?

First, read and believe the comments already given.

Second, look at the number of foreclosures that are in record numbers now (gives you an idea of how dangerous credit on homes are)

Third, are you a lawyer or credit broker? Do you know the iron-clad language needed in your contracts?

Fourth, if you are still intent on building your business this way after reading all of the comments from people in painting business, PLEASE talk to those in the credit business about all the implications you may not be examining.

If you decide it's still a good idea, I personally wish you all the luck and ask that you relate to us all the particulars on how you have made this a smart business decision.

Seriously, good luck. i hope you succeed.

thom · 08-15-2007, 10:04 PM

15+ years ago a local church asked me to finance an exterior refresh. They assured me they could/would pay me weekly. I wouldn't do it. The job still hasn't been done. Once you finish the work their priorities shift. The work you did is no longer the priority.

firemike · 08-16-2007, 06:20 AM

I pretty much agree witht the rest, I think it would not be advantagous to you to do it in-house. If you really want to offer that service, I would consider out-sourcing the financing, perhaps with your bank or credit union, or a third party financing company. That way, they do the credit checks, take the risks, etc. One less headache for you.

I would lean more towards the credit card idea. That way the homeowner can spread the payments out as long as they want. I have landed several jobs over the years because I accept credit cards and the other contractors didn't. The HO could get the work done and not leave themselves short on cash.

It also helps with upselling. HO budgets a certain amount for a project, and then decides they want additional work done or something changed, but doesn't have the money, they were able to put it on the card, get what they wanted, and everyones happy.