Your Guide to Contractor Financing

If you’re a contractor, you know the challenge customers face when figuring out how to pay for your work. Many clients come to you excited about the prospect of a renovation or eager to have you make a much-needed repair.

But they may not be prepared to hear the high cost of such repairs—especially when looking at higher quality parts and brands. When their everyday purchases are usually less than $100, it can be astounding to hear that a contracted job will cost them $30,000 or more.

Changing the Approach

Expert contractors quickly learn they can remedy this problem by changing their approach to announcing the cost of the job to their client. For example, contractors can break up the total cost and tell the client the more manageable monthly cost. They can also present a variety of contractor financing options to help the client feel at ease. In fact, so many larger jobs end up being financed that a contractor that only accepts cash is essentially leaving money on the table.

Here are just a few consumer financing options you can offer your clients for your future contracted jobs:

1. Bank Loans

Help educate your clients on their options when it comes to bank loans. Clients can apply for a wide variety of bank loans, including home equity loans, personal loans, term loans, and more. By educating clients on the differences between these options, they’ll feel confident and empowered to make the right choice for their needs. Provide information about where to get these types of loans and estimates on how much the loan might cost.

2. Specialty Lenders

Certain private lenders specialize in offering loans for home renovations and repairs. This is a great option to get your clients the money they need quickly and efficiently. Once you find one of these lenders who might want to work in partnership with your contracting company, you can brand your page to include this specialty lender as an option for your clients. Offer quotes to the customer and help them compare loan options. Just make sure you find a reputable lender before you go suggesting the company to your clients. Your endorsement carries weight.

3. In-House Financing

In-house contractor financing programs are not advisable for all contractors, but they are an option. If you choose to offer in-house financing, you’ll need to do all the lending tasks yourself, including credit checks, setting rates, and collecting on loans. This option can seem convenient to you and your clients, but it may be overwhelming to tackle all on your own—and, of course, it means taking on a risk that you won’t see repayment from all customers without a fight.

Finding the Right Option for Contractor Financing

Get informed about the best ways to finance any particular project, then be sure to pass the information onto your clients. They’ll appreciate having a contractor who is well-informed about consumer financing for contractors. Your confidence will be contagious, and they’ll soon be signing a contract to get started on the project.