Another way I’ve used financing is in situations where people DO have the money to buy. Their objection may be that their cash is tied up in investments, so they need to push off the purchase until they can move things around to get access to it.
I tell those people to opt into our six-months-no-interest financing. Now they have six months to move their investments around.
These things help set Total Comfort apart because it opens the doors to more up-selling, differentiates us from most competitors who don’t offer it, and helps us achieve a much higher closing rate.
Who Should BE Your Financing Partner?
In the HVAC universe, most major manufacturers – Carrier, Trane, Lennox, Rheem/Ruud, Goodman, and so on – offer all kinds of financing options. When I was first considering making financing part of the services Total Comfort offers, this is where I started. Go to your preferred vendor partner and talk to them about their plans and how to get started.
As a Carrier dealer, we use the financing services they offer. Carrier works with Wells Fargo, and we use them quite a bit. We even have the Wells Fargo portal right on our website. The customer or sales rep goes to our website, clicks on the financing button, and opens directly to a Wells Fargo financing application. We hand the iPad to the customer, so they can fill it out. It takes 10 to 15 minutes. We get instant approval or denial.
We also have financing options through our partnerships with the Home Depot and Turnpoint Services.
The fact is, you can have many different plans. Just remember to start with your manufacturer partner or your distributor. It is in their best interest to help you sell more. They can offer you a lot of help setting up financing plans that will work for your business.
You can also turn to other groups you work with – such as membership organizations. They often offer financing plans or can help you find a third party.
What to Look For
Some key things to look for in a financing partner include:
Ease of use. We look for vendors with a smooth system that is easy for the contractor to use and, more importantly, easy for the customer to use.
Reputable Company. Any outfit you work with that touches your customers must have a rock-solid reputation, and they must be a rock-solid company too.
Great Recommendations. This is very important. Peer groups such as ACCA MIX groups are also great resources to help you find alternative financing options. Industry friends or local business partners can be great resources too.
What Type of Financing Should You Offer?
Every financing company has many choices. They all have a rate sheet with 10 to 15 financing options.
We go through those rate sheets and select the ones we want to offer. We then train our salespeople to provide only the plans we’ve chosen.
From Wells Fargo, we typically use their 12- to 18-month, no-interest plan. These plans have very reasonable rates.
Our next level financing is the 48- or 60-month plan when there’s a good promotion.
Finally, we also offer several longer-term options. Typically, these are 80-month programs at 7.99% interest. This plan is for people wanting long-term financing at a reasonable rate for seven to 10 years. The interest on such plans can range from 3.99% to 9.99%, depending on how much of a fee you want to pay.
All of the options I’ve discussed here are through our Carrier Wells Fargo connection, Home Depot, and Turnpoint. For cases where a customer’s credit isn’t great and they can’t get preferred financing rates through these programs, we have an additional financing option through Finance of America. These options are called Benji™ or LendingPoint®. They are a national financing group focused on helping lower-income families.
If the customer still can’t get approved, Benji automatically takes another second look at financing in the 15 to 20-plus percent range. This is an excellent program for people who need help financially and have no other options. It is more expensive, but it’s better than having no heat.
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