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Do you offer customer financing?

  • Yes, and it helps me sell more jobs

    Votes: 2 18.2%
  • Yes, but it doesn't help much

    Votes: 1 9.1%
  • No, but I might consider it.

    Votes: 3 27.3%
  • No. I don't want to.

    Votes: 5 45.5%
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Marketing Consultant
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Discussion Starter · #1 ·
I just read an article about customer financing published today in Kitchen and Bath Design Magazine and I am curious.

According to the article not many contractors offer that option to their customers but about half of those who do report more sales.

How do you feel about it? Do you think it can help your business?

Do any of you offer customer financing? If you do, how does it work for you?

If you don't (or did in the past but no longer do), I'd also love to hear your reasons!
 

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I have no doubt that I could sell more if I did but with what kind of hassles trying to collect.I don't loan money and my bank does not do remodeling jobs.
My credit manager is Helen Wait.If you want credit you will have to go to Helen Wait!
 

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I have about 15 different plans and finance a HO up to $30k sitting at their kitchen table. Once the job is completed they sign a completion certificate, send it in...BOOM! Direct deposit in 48 hours. No hassles at all.

The finance companies charge different rates depending on the plan. 4% is the average for us. That gets passed on to the HO.

Sometimes they have the cash but want to set off parting with it for 6 months. 6 month no interest/no payments...just okay this form here. :)
 
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Contractor of the Month
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I've financed a few myself, I'l do it upon request for jobs that aren't that capital intensive.
 
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I have about 15 different plans and finance a HO up to $30k sitting at their kitchen table. Once the job is completed they sign a completion certificate, send it in...BOOM! Direct deposit in 48 hours. No hassles at all.

The finance companies charge different rates depending on the plan. 4% is the average for us. That gets passed on to the HO.

Sometimes they have the cash but want to set off parting with it for 6 months. 6 month no interest/no payments...just okay this form here. :)
You are not actually financing the jobs ?The finance company is?
 

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The Ultimate Wire Hider
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4,455 Posts
Selling financing does me more harm than good because my average client is either overextended in their current credit situation and/or they couldn't qualify at all. It ends up costing me the sale because if they were ready and willing to pay cash, they feel insulted when they get denied the credit as if I somehow have something to do with it.
 

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Contractor of the Month
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Selling financing does me more harm than good because my average client is either overextended in their current credit situation and/or they couldn't qualify at all. It ends up costing me the sale because if they were ready and willing to pay cash, they feel insulted when they get denied the credit as if I somehow have something to do with it.
How can that be? As an installer of A/V and Home Theater systems you are a purveyor or luxury goods, don't you find that most of your clients are very well off?
 

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Marketing Consultant
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Discussion Starter · #8 ·
I have about 15 different plans and finance a HO up to $30k sitting at their kitchen table. Once the job is completed they sign a completion certificate, send it in...BOOM! Direct deposit in 48 hours. No hassles at all.

The finance companies charge different rates depending on the plan. 4% is the average for us. That gets passed on to the HO.

Sometimes they have the cash but want to set off parting with it for 6 months. 6 month no interest/no payments...just okay this form here. :)
Hi BDiamond,
Thank you so much for sharing!
In average, what percentage of your all jobs are financed in this way, if you don't mind me asking?
How big is the overall impact on your business?
 

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Increased my sales by about 10%. One out ten at the moment and growing.

I am positive it will grow my sales by 20%+ when I start picking up momentum and experiment more with the marketing.

No hassles or I would not do it.

I disagree that it costs sales. If it is your qualifying and sales presentation needs some very serious attention.

That is called talking yourself out of a sale. That error is a well known galactic sales boner. Sorry but please go back to the drawing board with that blunder.
 

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I can't believe there are still companies out there that don't offer financing through third party banks.

Roughly half our jobs are financed with either one year no interest and no payments or 5 years of equal payments at a low interest rate.
 

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The Ultimate Wire Hider
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How can that be? As an installer of A/V and Home Theater systems you are a purveyor or luxury goods, don't you find that most of your clients are very well off?
Most of my clients make poor financial choices and have their priorities out of order. It's not uncommon for me to install 2 70" flat panel TVs in an apartment where the tenant is behind in their rent. Likewise it's not uncommon for me to install a whole-house audio system on a house in foreclosure where the owner complains about summer camp being too expensive to send his kid.

As odd as it may sound, some of the richest people have the worst money management problems.. and they know it. So they call me to install something that they can enjoy before their money runs out.
 

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You are not actually financing the jobs ?The finance company is?
Correct. However I am considering financing those that have stellar credit and are willing to make a big enough down payment to cover COGS.
 

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Selling financing does me more harm than good because my average client is either overextended in their current credit situation and/or they couldn't qualify at all. It ends up costing me the sale because if they were ready and willing to pay cash, they feel insulted when they get denied the credit as if I somehow have something to do with it.
Don't tell them they are turned down. People know they have crap credit. They are just hoping they'll get approved this one time. If they get a TD just tell them, "Mike, usually I can get an approval right away but they said they wanted to review some things which I don't get alot. In the event we aren't able to get an account set up I think you mentioned you were able to pay cash if it came to it correct? My suggestion is to set it up that way and I can call and cancel the applications...how's that sound?"

It gives him an out because he knows he's not getting approved and cancelling the apps will save the embarrassment.
 

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Hi BDiamond,
Thank you so much for sharing!
In average, what percentage of your all jobs are financed in this way, if you don't mind me asking?
How big is the overall impact on your business?
Around 85%. We wouldn't be open without it...
 
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Contractor of the Month
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I can't believe there are still companies out there that don't offer financing through third party banks.

Roughly half our jobs are financed with either one year no interest and no payments or 5 years of equal payments at a low interest rate.
Like you said, people need roof replacements, they don't need home automation.
 

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Marketing Consultant
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Discussion Starter · #16 ·
Don't tell them they are turned down. People know they have crap credit. They are just hoping they'll get approved this one time. If they get a TD just tell them, "Mike, usually I can get an approval right away but they said they wanted to review some things which I don't get alot. In the event we aren't able to get an account set up I think you mentioned you were able to pay cash if it came to it correct? My suggestion is to set it up that way and I can call and cancel the applications...how's that sound?"

It gives him an out because he knows he's not getting approved and cancelling the apps will save the embarrassment.
That is quite an elegant way to get both contractor and customer out of an otherwise uncomfortable situation, avoid possible PR crisis and hopefully still get the business! Great advice!:thumbup:
 

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Contractor of the Month
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Most of my clients make poor financial choices and have their priorities out of order. It's not uncommon for me to install 2 70" flat panel TVs in an apartment where the tenant is behind in their rent. Likewise it's not uncommon for me to install a whole-house audio system on a house in foreclosure where the owner complains about summer camp being too expensive to send his kid.

As odd as it may sound, some of the richest people have the worst money management problems.. and they know it. So they call me to install something that they can enjoy before their money runs out.
You need a better client base.
 
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