Opinion: Flexibility in Financing, Choices Helps Boost Your Business

by Kacey Larsen

Tired of grungy carpet, outdated cabinets and an unfinished basement, Jim and Kelly decided now was the time to remodel their nearly 14-year old home. Doing everything they wanted (i.e. high-end carpets throughout, a theater room and kitchen in the basement) would cost more than they’d saved for such a project, and they definitely didn’t want to use high-interest credit cards, even to make up the difference. Dipping into their home equity was another option, but they weren’t too keen to tie that up either. They concluded they would remodel in stages, starting with the basement.

They went looking for a remodeler, and after speaking to several who were within the ballpark of their basement budget, they encountered one who asked them what they would really need to do to get their dream home—and what was holding them back. He then gave them some financing options—including a same-as-cash loan and a loan with low monthly payments—that could potentially let them finish the entire remodel. They chose this contractor, applied for the available financing and quickly qualified for enough that they could do the entire remodel at one time. A win for them and the remodeler!

According to HomeAdvisor, up to 75 percent of all home improvement projects of more than $2,500 are financed in some way. If you’re a remodeler/home improvement contractor who doesn’t offer a choice of payment options like this remodeler offered Jim and Kelly, then you might be leaving thousands—even millions—of dollars in business on the table to potentially be picked up by your competitors. The amount lost could be especially felt during a home improvement boom like now. The latest Harvard Joint Centers for Housing Studies Leading Indicator of Remodeling Activity report indicates “strong and steady” growth in 2017, ending the year up 6.7 percent at $317 billion.

Every customer’s financial situation is different, and by offering a choice of how they pay, you could turn a small contract into someone’s dream project. Consider these three benefits of offering financing options through a qualified financing provider:

  • Competitive Advantage: In today’s competitive business climate, you can’t win on just a great reputation and excellent service. By offering payment options to your customers that are easy to apply for and include enough options for most homeowners with decent credit to obtain, you provide solutions your competitors may not.
  • Increased Sales: No one wants to skimp or settle on a project they’ll have to live with for years, but being limited in how they pay for it could make them only do the bare minimum. That doesn’t help them—or you. Research EnerBank USA conducted on contractors that offer financing choices and those who don’t shows that those who provide financing choices can see up to 30 percent growth in sales—or more—during an industrywide increase in home improvement spending. Customers paying with cash—usually a fixed amount like Jim and Kelly had—are less likely to splurge on larger projects. If you can offer a same-as-cash loan, they might upgrade a $8,000 project to $12,000. Or those who want to make low monthly payments would love to increase the size of their job and can if you offer a low-interest payment option.
  • Happy—and Repeat—Customers: Offering homeowners choices puts them in the driver’s seat and creates empowered, happy customers. Being able to finance their entire project easier and faster than home equity loans and less expensive than high-interest credit cards would make any homeowner happy. Also, if you and the financing provider you’ve chosen have given the homeowner a quality experience, they will be more likely to come back for more—and refer you to their friends and family for their home improvement projects.

Consider these other tips on offering choices—financing or otherwise—to help grow your business:

Don’t Assume

Say you drive up to a potential customer’s huge mansion. You might be tempted to skip explaining the cheaper material options—or not even offer them financing options at all—but then you learn the homeowner is mortgaged to the max and can only afford lower-value options. Or conversely, a customer in a small home might be a millionaire wanting high-end options. So make sure you consistently  follow your sales presentation with each customer.

Empower the Customer

Educate the homeowner on the choices they have to help match what level of product or service they want from you. Ask open-minded questions and then “shut-up” and listen.  Offer “good”, “better” or “best” solutions. No matter what, let them know about the full range of options you can offer so they can understand what they could reasonably afford or what payment options they’d need to consider to give them exactly what they want.

Offering financing options—or any other options to consider during a home improvement project—gives you a leg up over the competition. Again, no one is coming from the same situation, so you never know which method of payment or quality of kitchen cabinets will help give them their ultimate dream project. The more options, the better.


John Harris is the executive vice president of sales and marketing for EnerBank USA, a specialized bank providing unsecured home improvement lending through strategic business partners and independent home improvement contractors throughout the U.S. 

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