With so many options out there, how can you make sure that you’re picking the best contractor-offered financing for your business? There are many factors you need to take into consideration, and it’s important to remember that not all lenders are created equal. Finding the right one can be the difference between business as usual and taking things to the next level.
To start, you should ask yourself the following questions when looking at your choices:
- Does this lender understand my industry?
- How do they fit into my existing processes?
- What support do they provide my business?
- What support do they provide for my customers?
- Is this lender a safe and reliable option?
Expectations vs. reality of contractor-offered financing
If you’ve never offered financing as a part of your services, you may have some preconceived ideas about how customers are paying for their projects.
Expectation: Customers are using cash for their projects
Reality: As a contractor, it may appear as though many of your customers are using cash, but that’s not necessarily the case. Research shows that over 55% of home improvement projects are financed in some way.* This means that you’re missing out on a huge opportunity to close more jobs by offering your own financing.
*HIRI TFG Monthly report, released October 2023
Expectation: Homeowners are using financing because they have no other option
Reality: Homeowners enjoy the flexibility and convenience that come along with contractor-offered financing. This is even true for customers who were planning on using cash they have on hand for their project.
Expectation: Adding financing to my sales process will slow it down
Reality: We’re constantly working to ensure our technology makes things as easy as possible for you. For example, we have easy ways to help your customers see how much of a loan they may qualify for before they apply. Not only can this empower them to expand the scope of the job, but it allows you to better recommend products.
Plus, with paperless application methods and fast credit decisions, you can close more jobs in less time. This makes you more efficient and allows you to better allocate your valuable time. With additional features, you don’t need to chase down customers to collect signatures or payments. You can make payment requests in our online reporting tool and funds are sent to your account via ACH.
Expectation: Getting the help I need for my program will be difficult
Reality: We know you’re busy, and that you don’t have the time to play phone tag or wait on hold. That’s why you’ll be assigned your own relationship manager. This person will be your main point of contact at the bank. So, whether you need help with loans, your marketing, or training your team, they’ll be there for you.
Now that you know your customers are using financing, what are some best practices to get the most out of it?
We recommend mentioning the availability of payment options at these three touchpoints:
- In your marketing communications
- When setting the sales appointment
- During the sales bid
For many customers, their home renovation project doesn’t start when the contractor walks through the door, it starts with research. Homeowners will spend hours on websites, reading reviews, and looking at photos to find contractors. If they already know you provide convenient financing, it makes it more likely they’ll reach out.
Once they make contact, remind them you offer financing and will provide more information during the appointment. Finally, once you’re in the home, mention payment options again at both the top and when you present the bid. This can circumvent any possible sticker shock the homeowner may experience.
If they complete the application, you have a great chance at closing the job!
What makes regions home improvement financing unique?
Comprehensive onboarding
Adding a financing provider to your business is a big step, but if you have the right guidance from the word go, it’s easier to manage. Once you sign up, you’ll go through our onboarding process which runs through all the details of financing. This includes getting your staff onboard, managing the application process, requesting customer funds, and more. Plus, once you’re up and running, you’ll continue to have access to both webinar and on-demand training for every member of your team.
Dedicated relationship manager
It never hurts to have an extra hand or two to help you out of a tight spot. That’s why you’ll be assigned your own relationship manager. Not only are they available for any questions you have, giving you a single point of contact at the bank, but they can help with other aspects of your business. The more you work with them, the better understanding they’ll have of your business which means personalized advice and assistance when you need it most.
Easy-to-use technology
Introducing new components into your existing sales process can be daunting. If it overcomplicates the process, it can be frustrating for both your team and your customers. Every tool and resource we offer is built specifically for contractors and home improvement projects. This makes financing a value-add instead of a hinderance. In fact, Regions Home Improvement Financing’s technology was recently ranked #1 for ease of use.*
*2023 Regions Contractor Survey
Two decades of experience
With over two decades of home improvement financing, we’ve learned a lot about the industry. Not only can we help you with the specifics of your business, but offering financing allows you to be more flexible with fluctuations in the economy. This means less time getting lost in the woods and more time getting to work.
What are the benefits of offering financing?
- Boost close rate – By closing more contractor sales during the initial bid, your business can save time and money. A higher close rate means you don’t need to spend your valuable time chasing down cold leads and can, instead, get to work.
- Grow average project size – Better protect your profit margins by taking on larger projects, helping you to better manage your team’s schedule and save on resources by not having to switch between jobs as often.
- Increase leads – Mentioning the availability of payment options in your marketing materials can help you stand out from your competitors, so you will get more leads.
- Improve cash flow – You’re in the driver’s seat when it comes to your cash flow. You can now better manage your projects and spend less time waiting around for the funds you need.
- Reduce cancellations – If a customer knows going into a project how they’re going to pay, it makes it less likely that they’ll end up canceling.
- Eliminate discounting – When you offer financing, you have a tool at your disposal to help you overcome price objections early in the sales process, decreasing the likelihood you’ll have to offer a discount to close the sale.
What’s the best contractor financing for your business?
Hopefully you now have a better sense of what you should be looking for when it comes to the best contractor financing for you and your business. If you’re interested in growing your business, you can fill out this form to learn more about our contractor financing programs.
