Effective October 1, 2021, EnerBank USA ("EnerBank") merged with and into Regions Bank. Learn more here

EnerBank Blog

How should I be offering financing to my customers?

Posted January 28, 2019 by EnerBank USA

finance photo

For many businesses, it’s not uncommon for their customers to underestimate the cost of quality improvements and other large purchases. This occurs across many industries, like real estate, automotive, home improvement, and home furnishing, to name several. Today, we’ll focus on the benefits of financing projects within the home improvement industry.

Why offer financing?
If you’re a home improvement contractor, and a customer wants to begin a project that’s going to cost over $5,000, research shows that 50% of these customers will finance their project in some way. What’s more, customers who are offered a choice of financing options are more likely to increase the scope of their project, spending more than they had initially planned to get what they really want. So, by offering financing, you’ve increased your customer’s purchasing power, making it possible for a customer to get the home of their dreams now.

What type of loan does your customer really need?
The type of financing your customer needs (i.e., the kind of loan you’ll want to offer them) depends on what they’re purchasing and what it costs. In most cases, when purchasing something as substantial as a piece of property, financing is obtained directly through a bank or lender, rather than through the person or business selling the property.

In the home improvement industry, the type of financing a customer chooses may depend on the scale and cost of the project, along with how quickly they plan to pay off their loan. But, in 2019, regardless of the type of loan a customer may choose—one thing is certain—customers expect to be given choices. Whether we’re talking about health care or home improvement—people expect to be empowered and educated to make their own decisions. And, when it comes to a customer’s financial situation, it’s essential that assumptions aren’t made about how a customer will want to pay for a home improvement project.

To truly get a customer what they want, it is important to present them with all their options, and then let them choose the option that works best for them.

How will your customer obtain financing?
There are a number of ways a customer can obtain financing for a home improvement project. Here are a couple of them:

  1. Let your customer find their own financing. This option requires a lot of work on the part of the customer, and usually takes more time, which is why it tends to be relegated to substantial purchases (like buying real estate or remodeling a home). And, when a customer obtains their own financing, they are not as likely to commit to a specific contractor, which could end up impacting your ability to close the sale.
  1. Offer financing to your customers through an experienced and respected lending partner. Choosing a lending partner with the resources to meet the needs of both your business and your customers is crucial. And, since a lending partner’s business is built around lending money, they’re also likely to have the necessary infrastructure in place to support your customer’s needs—like having an established customer service model, for example.

At EnerBank, we know that lending can be complicated and painful if it isn’t done right. So, we offer a choice of unbeatable financing options for our business partners to choose from for their customers. Remember, just because a customer may be able to pay cash for their project, doesn’t necessarily mean they want to use their cash for it. So, they’ll appreciate being presented with payment options that may allow them to keep their cash on hand for other things or help them avoid paying penalties to liquidate an investment. Customer loyalty is built when you present your customer with options, and then allow them to choose which works best for them.

So, if you’re ready to work with a team of experts, contact us today. We’d be happy to assist you finding the best solution for your business.