Using Contractor Financing to Win Customers

Posted August 30, 2023 by EnerBank USA

Home improvement contractors operate in a dynamic and highly competitive industry. With so much competition out there, contractors must constantly seek ways to set their businesses apart. One way to do this is by using contractor financing to win customers.

This case study will explore how FreshCoat Painters overcame industry challenges by leveraging contractor financing for home improvements provided by Regions | EnerBank USA. With flexible payment options, FreshCoat Painters created a competitive advantage that won customers. Thus leading to remarkable sales growth and customer satisfaction.

The Roadblocks: Key Challenges for Home Improvement Contractors

Contractor financing for home improvement helps contractors overcome unique industry challenges. Before diving into real-life insights, let’s explore key pain points and how offering payment options can help overcome these hurdles.

1. Fierce Market Competition

Rising demand for home remodeling services is boosting the growth of the home improvement market. Analysts expect the industry to expand at a compound annual growth rate (CAGR) of more than 5% by 2027. Competition in the industry has become increasingly fierce.

Home improvement contractors must provide a unique selling point to differentiate their services. Contractor financing is a strategic tool to create this advantage. With financing, you can capture a broader customer base and establish your reputation as a contractor who understands your market.

2. Attracting Customers

Home improvement contractors may only cater to homeowners with cash or enough home equity to qualify for loans. This includes home equity loans (HEL) or home equity lines of credit (HELOCs). This limited pool of customers can hinder business growth, leaving a massive chunk of untapped market potential.

Contractor financing for home improvement opens doors to a broader customer base. This includes customers who may not have enough cash or home equity but want to make home improvements.

3. Overcoming Objections

Customer financial constraints often pose significant objections in a contractor’s sales process. Limited financing options or difficulty securing loans discourage customers from pursuing their desired projects. The more time a homeowner contemplates the project, the greater the likelihood of cost considerations affect their buying decision. By working with reputable financing providers like EnerBank, contractors can offer flexible financing options catering to customer budgets.

Contractor financing can help contractors overcome cost objections and close deals when customers are eager to get to work. The ability to present financing solutions as part of your sales process increases the chances of closing deals.

4. Building Customer Trust and Loyalty

Home improvement projects are often large in scale and cost, making trust an essential factor in your relationship. However, building customer trust and loyalty can be challenging, especially when customers have countless options. Offering contractor financing solutions addresses this challenge fundamentally.

The availability of financing showcases the contractor’s commitment to making their services more accessible. This option alleviates customer concerns about costs and uncertain payment terms, establishing trust and reliability.

Contract financing can also aid in creating long-term customer loyalty. Homeowners with positive experiences are likely to choose the same contractor for future projects, recommend them to others, and become brand advocates.

5. Project Delays and Cash Flow Concerns

Unforeseen circumstances like material shortages, adverse weather, and other factors can cause delays impacting contractors’ operations and profitability. These delays can disrupt project timelines and affect cash flow. Working with a reputable provider like EnerBank ensures your business can navigate cash flow concerns more effectively. Improved cash flow means covering ongoing expenses, procuring materials, and ensuring project continuation even when the unexpected arises.

How Contractor Financing for Home Improvement Helped FreshCoat Painters Improve Sales

We’ve uncovered various industry pain points facing home contractors. Now, we’ll explore an industry case highlighting the benefits of leveraging home improvement contractor financing.

FreshCoat Painters has been at the forefront of providing residential and commercial painting services. By working with EnerBank, the company improved its close rates, increased project size, and revolutionized its customer acquisition process.

Brian Santos, FreshCoat Painters’ director of education, shared the following testimonial outlining the remarkable benefits they experienced:

1. Increased Average Project Size

Providing flexible financing options makes it easier to upsell and grow any project’s scope. Before offering contractor financing, FreshCoat Painters’ average project size amounted to $3,500. After working with EnerBank, their average project size grew to $6,600. Offering convenient financing solutions helped FreshCoat Painters eliminate the financial barriers that often limit clients from pursuing larger-scale projects.

2. Improved Close Rates

Contractor financing for home improvement projects eliminates one of the most common sales objections in the sales process — financial constraints. With financing options available, FreshCoat Painters experienced a significant improvement in their close rates. Aside from eliminating cost concerns, this strategic move helped FreshCoat Painters showcase their commitment to meeting their customers’ needs, instilling trust and confidence in their services.

3. Improved Efficiency and Profitability

With a larger average project size and improved close rates, FreshCoat Painters enhanced its overall efficiency and profitability. Taking on more extensive projects allowed the company to optimize its resources more effectively and streamline operations.

The company consolidated its workforce and equipment for larger-scale projects, maximizing productivity and reducing downtime. Improved close rates also lead to a more predictable project pipeline. This allows them to better plan its resources and allocate its workforce in advance. Overall, this translates to improved cost savings and smoother project workflows.

4. Enhanced Ability to Serve Clients

Working with EnerBank allowed FreshCoat Painters to meet the diverse needs of their customer base. Customers who may have hesitated due to budget constraints now have the means to move forward with their dream projects. Financing options also made the company’s services accessible to a broader audience. It helped them tailor their services to match their customers’ needs and budgets.

EnerBank: A Trusted Provider of Home Improvement Contractor Financing

FreshCoat Painters’ success story highlights the remarkable benefits of leveraging contractor financing for home improvement with EnerBank. We’re committed to providing contractors with reliable financing options. Enjoy the following benefits when you work with us:

Home Improvement Experience: We have over two decades of experience in the home improvement industry. This helps ensure that we provide tailored solutions for contractors like you.
Reliability and Stability: As an actual bank, you can rely on the security and stability of our services. We fund and service all our loans, so you get paid quickly. Protecting all financial information throughout the process is our top priority.
High Approval Rates: EnerBank approves 4 out of 5 customers. This means you’ll experience fewer lost deals and higher conversion rates.
Stellar Customer Service: With EnerBank, you get a dedicated relationship manager, high-quality customer service, and a contractor support line. You can count on prompt and reliable support when you need it.

Join the many other contractors who have experienced the benefits of contractor financing through EnerBank. Explore our loan programs today to find the perfect financing solution for your business.