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Discussion Starter · #1 · (Edited)
Anyone providing financing for your customers?

With the way the economy is going, I've been marketing NO CREDIT CHECK financing with 90 day same as cash.

I use a company that funds the cutomer. To tell you the truth I don't know how they do it. They don't check credit. They don't even check employment. They give them the money up to $5k for any job they do with me.

Once I have the customer sign my regular contract, I use a machine to take encrypted electronic photographs of both sides of series of checks and get approved by bank within 60 second. I'm then guaranteed the money on the dates the customer wrote the check for. I have the flexibility to work a payment schedule with the customer. And all the burden is out of my hands. The funding company now has an agreement with the customer.

I had to pay $320 for the equipment setup. And I pay $149 a month. Only catch is I had to sign a 48 month lease for the equipment with the funding company. But it is a lease so it is 100% tax deductible. And I can transfer to someone else if I choose or sell the equipment at end.

It's unlocking a lot more doors for my sales though. I do my presentation, present the numbers, and if they have to "think about it" I then ask them if financing will help get their dream bathroom now. And there's no waiting for credit to be run. It's instant. "Bam, you got your bathroom paid for."


Anybody else doing similar? How many more customers are you closing a week?

Interested in seeing how you guys are marketing financing.
I have a dreamy bathroom pictured on glossy postcard that says:
Make your dream bathroom a reality!
Custom design
All the features you want

Get yours today
Financing available
No credit check
 

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I'm a Mac
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That's a great idea/promotional tool. I like the no risk to you part.

Any chance this company does amounts up to a few million, I have a few developers I know who could use that.
 

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Anyone providing financing for your customers?

With the way the economy is going, I've been marketing NO CREDIT CHECK financing with 90 day same as cash.

I use a company that funds the cutomer. To tell you the truth I don't know how they do it. They don't check credit. They don't even check employment. They give them the money up to $5k for any job they do with me.

Once I have the customer sign my regular contract, I use a machine to push the money through (if they want financing), and I get the money in my account. I'm not having to wait for monthly payments. And all the burden is out of my hands. The funding company now has an agreement with the customer.

I had to pay $320 for the equipment. And I pay $200 a month. Only catch is I had to sign a 48 month lease for the equipment with the funding company.

It's opening a lot more doors for my sales though. I do my presentation, present the numbers, and if they have to "think about it" I then ask them if financing will help get their dream bathroom now. And there's no waiting for credit to be run. It's instant. "Bam, you got your bathroom paid for."


Anybody else doing similar? How many more customers are you closing a week?

Interested in seeing how you guys are marketing financing.
I have a dreamy bathroom pictured on glossy postcard that says:
Make your dream bathroom a reality!
Custom design
All the features you want

Get yours today
Financing available
No credit check
90 day same as cash
Well stop holding back on us who the hell is it? up to 5k is perfect for me
 

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I've gotten a ton of those companies hitting us up since January.

Costs are steeper but the ones I'm talking about do way more than $5000 financing. They all do same as cash no interest and all that stuff.

I think there is some potential for the stuff, but as of now we don't even take credit cards and we're as busy as can be so I'm not ready to sign up with any of them and pay 5-15% fees to them.

I had to pay $320 for the equipment. And I pay $200 a month. Only catch is I had to sign a 48 month lease for the equipment with the funding company.
That whole 'leasing' thing is such a scam, it was really big 10 years ago with credit card processing accounts, I'm not supprised these guys are doing it though.

That better be one nice terminal for $10,000! :laughing:

I can still remember 10 years ago when card services international wanted us to lease from them a credit card terminal and their software, it would have come to about $8000, we asked them about paying cash up front for it, and they negotiated it down to $900.00 :blink:
 

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Discussion Starter · #9 · (Edited)
Between February and now I've had a good response from our tax return time campaign for bath remodeling. Some get sticker shock at the cost of tiling a shower and floor because they don't know all that is inovlved with it.

I've had more than a few say "call us back in a month" or "we really can't afford it right now".

So instead of haggling, or just losing the sale completely, for just a couple hundred bucks a month I've opened the door to more sales to be made right then and there.
I actually have a stack of estimates I've accumulated over the past 6 months of people that were waiting to get funds available. It's tough to save up $5k (at least for the average middle class working family). Now the money is there.

And I was kind of laughing at first at the company's $200 a month scheme for "leasing a system". But there's nothing taken from me. Heck, if they took 15% off a $5,000.00 sale of mine I'd be paying over $700.

And I combat the $200 by letting them know that there is no interest for 90 days, but we charge a $25 FLEX PAY FEE for the service. Heck, they're guaranteed $5,000. And they don't even need to have a job. And if they don't pay it's not on my shoulders. We've been paid.

I was lauging at first. Then I was :eek: - and writing a check to get started.

I'll let ya'll know how many more customers a month are using the financing.
 

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Matt,

Please send me an e-mail to [email protected]

I would like to know the provider and the ceiling cap limits if you can share that with me.

I just have way too many customers that would like to go with me, but they are needing a little boost to make the deal.

I have been offering in house financing and if it is for over 90 days, they get a $450.00 fee to cover the automatic Mechanics Lien documentation fees to protect my stake in the receivables.

Other than that, there is the monthly late charge, but at least they have time to pay, but it screws up my cash flow for immediate needs.

Ed
 

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And I combat the $200 by letting them know that there is no interest for 90 days, but we need to charge a $50 finance charge for the service. Heck, they're guaranteed $5,000. And they don't even need to have a job. And if they don't pay it's not on my shoulders. We've been paid.
Is that legal? I was under the impression you can't change your prices like that based on if the customer decides to finance or pay cash.
 

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Is that legal? I was under the impression you can't change your prices like that based on if the customer decides to finance or pay cash.
That is a rule from Merchant Account Providers regarding Credit Card Transactions.

What he is doing, would be adding a Processing Fee for handling the paperwork of an actual loan being Financed through a specific Lending Institution.

Ed
 

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So can I add back in the $1500-$4000 that the finacing is going to cost me to offer it to a customer?

Most of the ones I have seen are very expensive to use, basically the customer is getting a free ride and the contractor is paying for their free credit ride through a percentage fee paid to the financing company.
 

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So can I add back in the $1500-$4000 that the finacing is going to cost me to offer it to a customer?

Most of the ones I have seen are very expensive to use, basically the customer is getting a free ride and the contractor is paying for their free credit ride through a percentage fee paid to the financing company.
Correct on both accounts.

Is the work worth it enough to up your sales price to have that included in the cost of the contract and consider it a cost of doing business on your pricing, or would you feel more comfortable with having a separate line item for the finance costs.

I add it as a separate line item on my installment plan agreement for the Mechanics Lien charges if the unsecured debt will take longer than 90 days, so that I am reimbursed for the fees related to filing a lien.

Ed
 

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Discussion Starter · #16 · (Edited)
Mike Finley,

First, it is not against the law to charge for this type of financing. It is part of a federal system called Check 21 approved by the government in October 2004. You can look it up for yourself. It's just like check cashing that charge fees on each check. And they're charging a whole lot more than 7.5%


Yes, you will have to pay transaction fee to the bank. It is what it is. After all, the bank is taking all the risk. If you were offering to "loan" the customer money and YOU were held responsible for the risk wouldn't you want to get paid a small fee for providing the service?

Aren't you one of the guys who still charges for estimates? Well, why should your customers pay that? Because you are providing a service, right? So yes, the bank is providing a service and is charging for that service.


I bet when businesses first started accepting credit cards there were other guys on the block that didn't want that heavy swiping machine. But think if you locked the door on people who didn't have the cash in their checking account right there to make a purchase? How much business would you be losing?
Not only that, but imagine how many more people aren't even bothering to call because they are still dreaming of getting their project done. They don't have good credit and they don't have the cash handy. That door is locked for them. Imagine if you had the key to unlock that door for those potential customers. How much more business could you get in a week? in a month? in a year?
I don't think the big box stores like Lowe's or Home Depot aren't even offering a system like this. Even if you were a little 800 sq ft showroom in a shopping mall across the street from them, how much more foot traffic could you bring in with a sign outside stating you offer NO CREDIT CHECK financing?


I've been looking for years on how to beat the "I have to think about it" objection. And really it comes down to price. Now I conquered it. We can offer financing instantly and be paid within days.
 

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Mike Finley,

First, it is not against the law to charge for this type of financing. It is part of a federal system called Check 21 approved by the government in October 2004. You can look it up for yourself. It's just like check cashing that charge fees on each check. And they're charging a whole lot more than 7.5%


Yes, you will have to pay transaction fee to the bank. It is what it is. After all, the bank is taking all the risk. If you were offering to "loan" the customer money and YOU were held responsible for the risk wouldn't you want to get paid a small fee for providing the service?

Aren't you one of the guys who still charges for estimates? Well, why should your customers pay that? Because you are providing a service, right? So yes, the bank is providing a service and is charging for that service.


I bet when businesses first started accepting credit cards there were other guys on the block that didn't want that heavy swiping machine. But think if you locked the door on people who didn't have the cash in their checking account right there to make a purchase? How much business would you be losing?
Not only that, but imagine how many more people aren't even bothering to call because they are still dreaming of getting their project done. They don't have good credit and they don't have the cash handy. That door is locked for them. Imagine if you had the key to unlock that door for those potential customers. How much more business could you get in a week? in a month? in a year?
I don't think the big box stores like Lowe's or Home Depot aren't even offering a system like this. Even if you were a little 800 sq ft showroom in a shopping mall across the street from them, how much more foot traffic could you bring in with a sign outside stating you offer NO CREDIT CHECK financing?


I've been looking for years on how to beat the "I have to think about it" objection. And really it comes down to price. Now I conquered it. We can offer financing instantly and be paid within days.
Matt I think you're confusing about 4 different things here.

#1 I could careless if this works or doesn't work, I have no dog in the fight of what is helping you, if this is the greatest thing since sliced bread for you then I'm happy that it is.

A couple of things you are confusing---

A no credit check credit offering is a very different animal then having a financing system for jobs.

NO CREDIT CHECK - is for people with sh*tty credit. Not for people with good credit who want to finance a job. These are two different markets.

When our average remodel is in the 20K range those customers live in houses quite different then the bust out who can't get credit.

The appeal for these customers is using somebody elses money. Most of the financing options solicited to me are SAME AS CASH options, meaning a customer can do the financing and pay it off within a fixed amount of time with no interest accrued, no finance charges.

I don't see too many people in that scenario saying, I'll take you up on the offer of no interest same as cash and then have you tack on $3500 to the bill. :blink: That would be kind of a problem don't you think?

I'm not going to unlock any business offering $5000 financing to people with bad credit. Those people don't live in neighborhoods with houses that people will spend the kind of money on that we work on.

The only questions about financing we ever get are a 10 second... do you take credit cards? No. Okay, here is a check then. That's about the extent of it.

Like I said if this works for you, great. My problem with all the people who approach me with these financing scenarios is they are no different then the CC deal in that you have to already have the bid bumped up to cover the financing fees because I don't see how you can add them if a customer wants to take you up on a financing option.

Now if they were good old tried and true, same ol story, hey you want to finance the project? Okay, here is the deal the customer gets charged the interest then I would be fine with it cause then I'm not paying for the customers finacing out of my profit.
 

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Discussion Starter · #18 ·
You're right Mike, we're talking about two diffent customers. Not customers with $20k in their banking account.
I may get 2 of those a year.

I'm talking about the everyday customers. The ones who don't have the best credit or large sums in their bank account. Just regular "Joe's" like me that are part of our middle class genre. The ones waiting to get their tax return to put a deposit on a project.

I wish my dreamworld of people just nonchalantly handing me a $20,000 check were a reality. But honestly, I don't even know people with that much personal credit.

Maybe I should open an office out your way.
 

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I don't know about that - (in regard to your economic climate vs mine.) You have 14 fortune 500 companies located in your area, we have 12. Denver's media family income is $47,000. Charlotte's is $52,000.

Perhaps you just aren't marketing yourselves toward the right people?
 

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This feels like another system I've seen around here that is a payday advance. All it takes is an open checking account. Other states may vary but in Illinois if you write a NSF check you're subject to triple damages. I suspect the system is to hang a carrot in front of people with no money and slam them hard when the check bounces.

Count me out.
 
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