Customer Financing
Definition
Customer financing offers homeowners a loan or payment plan to cover a large repair or replacement, turning a single big invoice into monthly payments.
What Customer Financing Means for Your Business
What it means
Customer financing brings a third-party lender into the deal. The contractor gets paid in full, the lender carries the note, and the customer pays monthly over 24 to 120 months.
Why it matters
Many customers cannot write a $9,000 check for a new furnace. Financing keeps those jobs in your shop instead of pushing them to 'patch and pray' repairs. Shops with financing close 20% to 40% more large-ticket work than shops without.
How contractors use it
The shop partners with a lender, trains techs to present financing as a standard option, and submits applications from a tablet in the customer's home with instant approval.
Real-World Example
An HVAC company offered financing on every replacement quote and closed 38% of jobs with financing at an average ticket of $11,400. That added roughly 180 extra installs per year or $2.05 million in revenue.
Related Terms
Close Rate
Close rate is the percentage of presented estimates that result in a booked job or signed contract.
Average Ticket
Average ticket is the mean revenue generated per service call, calculated by dividing total invoiced revenue by the number of completed jobs.
Estimate
An estimate is a written offer of price and scope that a contractor provides to a customer before beginning any work.
Merchant Account
A merchant account is a specialized bank account that allows a business to accept credit and debit card payments from customers.
Interchange Fee
An interchange fee is the portion of a credit card processing fee that the merchant pays to the card-issuing bank on every transaction.
Put This Into Practice with Free Software
Kaldr Tech handles customer financing and everything else you need to run your shop. $0/month, 3.5% + 30¢ per transaction.