Here’s Why Top Contractors Offer Financing
Contractors face a lot of challenges in the execution of their roles. For instance, a homeowner will ask for a bid and then get surprised at how much it costs. At this point, the homeowner has two choices: undertake the project in phases or cut back on the project scope. None is a good option for the contractor or the homeowner.
For a homeowner, it means having to settle for low-grade products or consistent disruptions to their family life. For a contractor, it means having a less satisfied client and missing out on the higher project cost.
For instance, when the average ticket in a property improvement project is $15,000, if you don’t offer contract financing, you aren’t in the game. It’ll consummate the sales and make your customers comfortable.
That’s why the top and successful contractors offer customer financing options. The latest data from Remodelling 550 in 2018 is a striking example.
In this data, almost 96 percent of the best 50 contractors in the list offers financing options. Only 83 percent of contractors on the bottom 50 list do the same.
Having contractor financing is among the few reasons why these companies are on the top. Studies show that funding of increases job sizes by 30 percent and closes rates by 18 percent. So what does this mean?
When you offer good, better, and best options for your clients, rather than choosing the baseline solution, clients are likely to select the best or better solutions.
For instance, rather than choosing a few windows, the clients will choose high-efficiency models and renovate the entire room other than installing a few windows.
Thanks to technological advancements, many larger contracting firms are using end-to-end software solutions that integrate financing options to your sales process. In doing this, the information that’s being collected- names, address, among other details- will be used to auto-populate your loan forms. Your clients will press a button and get an idea on the payment options at their disposal.
Most popular contract financing options are like 12 or 18 months cash interest-free financing and more conventional financing spanning over months or years. Like getting a credit card, a contractor must pay a fee say 6 percent for some financing options. However, these fees can still be placed into the cost of this project allowing customers to even pay for them.
However, not all financing is attached to some fees. Some contracting firms work with credit unions that offer low interest rates or no charge at all.
Irrespective of how a contractor chooses to offer their financing options, the ones who want to grow their enterprise needs to consider it. In most cases, the companies that provide contracting financing are likely to become successful in the industry.
Any person planning to undertake a project needs to consider how they will finance it carefully. Different payment and financing options exist. Among these is the contractor financing option. The amount your client gets depends on the scope and length of your project.