Home Improvement Projects Are Not Sold Until They’re Financed!

By HomeAdvisor

Updated March 5, 2019

Payment with Credit Card

The largest and most successful companies do not rely on the customer to have the cash to fund their home improvement. Nearly all of them offer a financing option. The market is changing and your ability to offer competitive and homeowner friendly financing is imperative to your company’s sustainability and growth.

The Electric & Gas Industries Association (EGIA), a non-profit organization, through research and data acquired implementing utility sponsored and contractor based financing programs, found that most homeowners prefer unsecured home improvement financing for projects below $20,000.

Up To 75% Of Home Improvement Projects Are Financed

Conservative estimates from market data and input from home improvement contractors nationwide indicate that as high as 75% of home improvement projects over $2,500 are currently financed. That’s a fact, yet many contractors will dispute that high figure, because to them a homeowner drawing down an existing home equity loan, refinancing their mortgage or using a personal credit card to fund the project, looks to them to be a cash buyer.

With market conditions changing, there is a growing trend among homeowners to seek out unsecured project financing directly from their contractor or service provider. While secured financing is the preferred option for some homeowners, not all have adequate equity built up in their home to qualify or they have used up their equity over the past few years. Additionally, a growing number of homeowners want to retain their equity and keep their personal credit card balances open in case of emergency. Many also prefer the easy to use and quick loan approval associated with most unsecured financing programs.

Offer Financing As Part Of Every Sales Call

The most effective contractors recognize the need for and value in offering their customers a homeowner friendly, competitively priced financing solution. The best programs available finance 100% of project cost, are independent of the manufacturer and cover all of the contractors financing needs regardless of product brand. They are easy to use, require minimal paperwork and provide the contractor with the ability to close the deal in the home. The best unsecured financing programs also offer 9.9% APR or lower and terms of 12 years or more, to keep homeowner payments low.

Financing is a sales tool that should be used as a center piece of every sales call. Don’t assume your customers have cash and even if they do, don’t assume that they want to use it on your project. No matter how competitive you are in the marketplace, chances are your project cost is higher than your customer imagined it would be. Letting your customer know up front that you have homeowner friendly financing available, will put them at ease and make your sales presentation much easier. By integrating financing into each and every sales call, you’ll see a dramatic increase in overall sales and profitability. Financing enables contractors to:

  • Decrease Customer Sticker Shock
  • Increase Average Sales Price
  • Close More Deals, Quicker
  • Increase Their Professional Presence

Selling Monthly Payments Increases Job Scope & Profitability

Since the majority of homeowners finance home improvement projects, they typically have an eye of the impact your project has on their overall monthly costs. Just like all of us, your customers have a household budget to live within. In order to increase job scope and profitability, the top contractors recognize this customer buying trend and sell their home improvement solution based on monthly payments.

By selling payment, contractors are able to move their customers up to more comprehensive, higher value solutions. The table below illustrates the “Power of Financing” and how by leveraging terms and interest rates currently available through industry leading financing programs, you can enable your customers to afford to invest in larger, more profitable, high-end solutions.

The next time you call on a customer, leverage the power of financing and be prepared to offer low monthly payments. For example, instead of presenting your job cost proposal as a $7,500 home improvement, present the project as a high value solution at a low $89 per month and watch your sales soar.

Change Out Upgrade High Line
Total Price
Total Price $6,000 Total Price $7,500
Monthly Payment
$95.39*OAC Based On 9.9% @ 60 MOs.
Monthly Payment
$78.96*OAC Based On 9.9% @ 120 MOs.
Monthly Payment
$89.21*OAC Based On 9.9% @ 144 MOs.

Financing…Don’t Leave Your Customers Home Without It

Financing is one of the most critical resources in your customer sales tool kit. Don’t knock on another door without an effective financing solution in your sales arsenal. Your competitors are armed and dangerous, and in many cases may be stealing your customers without you even knowing it.

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