Back to all posts
February 28, 2024

Mythbusters: Debunking 5 common myths about home improvement contractor financing

There are a few contractor financing myths floating around. In this blog, we debunk those myths and reveal the truth.

Mythbusters: Debunking 5 common myths about home improvement contractor financing

Myths about financing have been around as long as financing has been offered. But many of these myths are just that — myths. We’re here to debunk five of the most common myths we’ve heard at FTL Finance and reveal the truth.


One of the most common myths is that customers don’t need financing — most of your customers pay in cash, right?

While unplanned HVAC and home improvement repairs have typically come from emergency savings, the truth is 81% of Americans didn’t increase their emergency savings in the past year (with 57% attributing inflation as the cause). So, your customers who typically pay in cash? Maybe they can’t afford to do so now. Or if they can afford it, financing may still be easier on their bank account and less stressful. 

That leads us to our second point: even if your customers don’t need financing, they may still want financing options for various reasons. Financing has become as common as cash, card, or check. It’s no longer reserved for large purchases like homes or cars; it’s used for everything from groceries to cell phones. 

Plus, many customers understand the time value of money (or the idea that the money you have now is worth more than the same money in the future). By financing and keeping some money in their pocket now, the customer can invest that money, save it, or put it to better use than it would be tied up in a large expense. (Tip: Read our blog on same-as-cash loans for advice on appealing to this kind of customer.) 


Even if customers need financing, surely you don’t need to offer it to every customer, right? If a customer needs or wants financing, they’ll ask for it. Or if they don’t ask for it, you can offer it at the end to save a sale.

The trouble with this thinking is that it puts the payment decision in your hands, not your customer’s. Sure, customers who know they need or want financing will ask for it. But what about the customers who would use financing but don’t think to ask for it?

Let’s say you’re quoting a customer and decide to present them with “good, better, and best” options. The good option solves their immediate need(s), the better option offers a little more, and the best option includes all of the bells and whistles. Now, we know that HVAC repairs are often emergency expenses, and many customers can only afford what is absolutely necessary — if they’re paying cash. And if cash is their only payment option, they’ll likely go with the lowest price point.

But financing takes that large total and breaks it into small, affordable monthly payments for your customer. You could present these monthly payments before the grand total so there’s less sticker shock. For example, “Your total is $300 per month for 36 months, or $10,000 today if you prefer one payment.”

If we take it one step further, monthly payments also make those “better” and “best” options in your quote more appealing. An extra $25 or $50 per month is a lot easier to work into a budget than a one-time payment of $2,000. But they can’t make that decision if they’re never presented the option to begin with.


As we lean further into the idea of financing as an alternate payment method, you may start considering other logistics. For example, won’t a financing application slow down your sales process? Especially during the busy season, your techs need to wrap up and move on to the next job.

Offering financing with FTL Finance doesn’t take longer than a cash transaction. Let’s walk through the process, starting with providing a quote. Our AppTracker tool can provide quotes for everyone, not just those who want financing. You enter data into the system, and it will generate payment options to present to your customer. If your customer decides to pay another way, you haven’t lost any time. But if your customer wants to pay with financing, your quote is ready to go, and you can send them an application right from AppTracker.

Once their application is submitted, your customer will receive a decision within 15 minutes (during processing hours), not hours or days. In fact, you could spend less time waiting for a decision than it would take to negotiate a cash discount or try to save a sale after a customer gets sticker shock.


We’ve talked about how the current economy and inflation are difficult for customers, but it’s difficult for contractors, too. After a couple of great years, business is starting to slow down because prices are rising, and repairs are becoming more common than replacements. So, won’t contractor financing fees eat into your bottom line even more?

Truly, offering financing shouldn’t eat into your bottom line at all. Many lenders, including FTL Finance, offer programs with no dealer fees. And if you want to offer financing options with fees, you can work the dealer fees into your overhead costs, just like you would with credit card fees.

In fact, financing should help improve your bottom line. You’re taking on less risk because customers owe the lender money, not you. You get paid regardless if the customer makes payments on their loan. Also, customers tend to spend more when financing their HVAC job because it’s spread over a longer period. Like we said, it’s a lot easier to find an extra $20 per month than an extra $2,000 all at once.


It’s no secret that financing can be complicated. Not everyone knows the ins and outs of financing, just like most people don’t know the ins and outs of HVAC systems or how to renovate a home. As you know, that’s what professionals are for.

At FTL Finance, we won’t leave you high and dry when you partner with us to offer financing. Each contractor receives training after they sign up that covers everything from how to use our digital tools to choosing which financing programs to offer. This training is also available for your employees, so you don’t have to worry about teaching; they can learn directly from the source.

We also offer two support members for each contractor, and we have a dedicated homeowner support team to help your customers. So, you don’t have to know everything about it — we have that covered.

Financing is simple when you partner with FTL Finance. And when you offer financing to every customer at every stage of the sales process, you will see an increase in sales and no slowdown in your sales process.


Read more articles like this:
Copyright © 2024 - FTL Capital Partners LLC dba FTL FinanceAll Rights Reserved | NMLS ID 2133635