How Unsecured Home Improvement Loans Work | EnerBank USA

As a contractor, it’s in your best interest to make it as easy as possible for your customers to get the home improvements of their dreams. Offering payment options to your customers is a great way to make the process of paying for a project easier.

The most successful contractors help customers work through these decisions by offering their own choice of payment options. And though there are many options for dealers when it comes to home improvement financing, you can’t beat the stability and trust you can find when working with a federally regulated bank that has experienced weathering tough economic conditions.

For contractors, unsecured home improvement financing can be a great option to help close more deals. Below, we’ll discuss what it is, how it works, and some of the benefits of offering it as a payment option for your customers.

What are Unsecured Home Improvement Payment Options?

Unsecured home improvement payment options are a type of personal loan that homeowners can take out that requires no collateral. Unlike secured loans, a homeowner can obtain an unsecured loan quickly, and without the hassle of home appraisals, a long loan process, or add a lien on their home. And customers with a wide range of credit scores can often be approved for these types of loans. For example, four out of five applicants for a Regions | EnerBank home improvement loan are approved. This makes it a great option for those customers who want to get started on their home improvement project right away.

How Does Unsecured Home Improvement Financing for Contractors Work?

To begin offering a choice of payment options to your customers, you’ll need to join a loan program with the bank. We’ll provide you with a brief orientation and all the tools you need for success. You’ll start by making sure you advertise payment options in your marketing materials and offer a choice of payment options to 100% of your customers.

Homeowners can qualify for an unsecured home improvement loan by filling out a quick and easy paperless application. As the contractor, you get to choose the specific loan products you’ll offer (terms, rates) that fit best with the project and your process.

Once your customer is approved for the loan, you can get started on the home improvement project, and the bank pays you directly via ACH, so you don’t have to worry about collecting signatures or payments from the homeowner.

There are several types of home improvement loans for contractors, including same-as-cash, reduced-interest loans, and even zero-interest loans. Homeowners can borrow enough to cover a simple HVAC replacement or fund a larger remodeling project.

Benefits of Unsecured Home Improvement Loans for Contractors

There are many reasons to offer unsecured home improvement payment options to your customers. And the benefits don’t just stop at your customers — by having a variety of appealing loan options, you’ll be able to boost your close rate and grow your business. Here are just a few benefits of unsecured home improvement loans for contractors:

1. Quicker Turnaround Times

   Have you ever had a project get delayed because your customer is unsure how they will pay for the project? Since unsecured loans have quick turnaround times, you’ll be able to finalize the loan in just a few minutes, which will help you close deals faster and reduce follow-up to secure the job. You’ll also have happier customers, which will help your business grow through positive reviews and recommendations to friends and family.

2. Reduce Cancellations & Eliminate Discounting

   You can expect your cancellations to be reduced when you offer a choice of payment options to 100% of your customers, because it ties the project to you — a customer will be more likely to stay with you and not ask to delay the project to perform further research or seek additional bids. You also won’t feel the need to try to “save a sale” by cutting into your margins with discounts, because payment options, when offered correctly, eliminate cost objections.

3. Increase Your Leads & Boost Your Close Rate

   You can see a 50% increase in leads (plus a better conversion rate) when you advertise a choice of payment options in your marketing materials and on your website*. This is because offering a choice of payment options widens your sales funnel and better qualifies your leads — because many customers haven’t yet decided how they’ll pay for their project when they start shopping. When you offer options, you increase possibilities and create opportunities for closing deals that wouldn’t have otherwise existed.

   Meanwhile, the research data shows that offering a choice of payment options can nearly double your close rate. For example: assuming a 25% baseline, you can increase your close rate to 44% when offering a same-as-cash loan and a low monthly payment loan*. When you combine increased leads with increased close rates, you see a multiplied effect on your business!

4. Grow Your Average Project Size

   Finally, offering a choice of payment options results in bigger jobs. Homeowners who finance their projects spend 43% more on their home improvement^*. More than one-third* of homeowners regret not spending more on their projects to get the results they truly wanted. A choice of payment options helps them get what they truly want, which means more business for you.

Offering Unsecured Home Improvement Loans to Your Customers

When it comes to payment options, your customers want a choice. Every customer has a different budget and financial situation, and by providing a choice of payment options, you’ll draw in more customers, stand out from the competition, and close more deals.

Join your loan program today!

^*Brickyard Study conducted by EnerBank USA, 2018