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What Are Same-As-Cash Loans?



There are a lot of different loan types out there, so it’s easy for those outside the lending business to get confused. Even within the lending business, it’s easy to lose track of the assortment of different industry-specific loans. So, if you’re unfamiliar with “Same-As-Cash Loans,” or aren’t sure exactly what the term means, don’t be too hard on yourself. After you’re done reading this, you’ll know these unique loans backward and forward.

What Are Same-As-Cash Loans?
A true Same-As-Cash Loan is a short-term lending solution where no interest or monthly payment are required during a set “Same-As-Cash” period. Then, at the end of a predetermined period, the loan is paid off. So, in the end, the customer pays the same amount on the loan they would have paid up front with cash. The only difference—they had the advantage of keeping their cash on hand longer (hence the name).

What type of customer do Same-As-Cash Loans work best for?
Same-As-Cash Loans work best for customers who have cash on hand, need temporary financing while waiting for a rebate, bonus, or incentive payment, or those who have investments they do not wish to liquidate.

Same-As-Cash Loans also work well for customers who need to obtain financing quickly for big-ticket purchases, such as furniture, recreational vehicles, expensive electronics, or home improvements, and don’t want the hassle of a lengthy approval process or need for collateral. In the home improvement industry, these loans can be offered by contractors—allowing the customer to avoid the need to search for funding on their own.

Who should avoid Same-As-Cash Loans?
Same-As-Cash Loans do not work well for customers who need to make monthly payments, want a longer-term loan to reduce the amount of their payments, or don’t have access to cash to pay off a loan in a lump sum.

Why Offer Same-As-Cash Loans?
You might be wondering why it’s important to offer a Same-As-Cash Loan as a payment option for your customers, especially those who tell you they are paying cash for their project. It’s a fair question, and there’s a good answer for it.

When you walk into a customer’s home, you don’t know if they’re paying cash or planning to pay for their project some other way. And, even if they tell you they're paying cash, that money could actually be coming from other sources, such as cashing out a CD, liquidating stocks, a home equity line of credit, or by dipping into other assets with steep penalties, tax implications, or other costs.

The fact is, half of all home improvements over $5,000 are financed in some way. And, offering your customer a choice of financing options not only educates them about other potential ways to pay for their project, most importantly, it gives them the opportunity to make their own decision about the payment option that works best for them, and allows them to choose the project they really want.

Conclusion
So, if you’re a Home improvement contractor and want the ability to offer your customers financing, like Same-As-Cash Loans, contact EnerBank today to get started. Our lending experts will guide you through the process of setting up a financing program that meets that specific needs of your business.

Because loans don’t have to be confusing or complicated—let us help to make them simple for you and your customers.



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