The idea of consumer financing can bring out a costly bias in any HVAC business not currently offering it. Contractors might ask themselves, “Which customers need financing?” instead of the more revealing and productive question, “Which customers want financing?”

Many HVAC companies include a customer base in a high-end market, with customers who can afford to replace a system and pay in full up front. So, many HVAC companies don’t bother with investigating or promoting financing options. But, even if customers don’t need financing, they should expect to be offered an option.

And, many manufacturers have already been converted on this topic. Contractors and manufacturers alike find that offering financing can lead a homeowner to making a higher dollar purchase than they would have otherwise chosen. This may be for many reasons, but one that cannot be denied is that those customers don’t have to shell out a big check at the end of the job. Those manufacturer partners also often offer considerable flexibility.

Anyone can understand how choosing a same-as-cash installment plan can allow a customer to hold on to more money for longer and to generate income with it through earning interest or investment. The irony of not offering financing to wealthier customers is that those are the very people who are more likely to actually be in position to take advantage of that strategy.

Regardless of whether the customer could pay in full if absolutely necessary or not, it allows you to price equipment like you would a car — with a monthly price that seems way more feasible than the full asking price. A smart contractor also understands that a homeowner is more likely to buy high efficiency or higher-end equipment if they see a breakdown in terms of monthly payments versus a lump sum.

Contractors should keep in mind that while the “same as cash” scenario has its own benefits, making the most of financing does involve understanding your customer base as a whole. Without that understanding, you may end up offering financing that does not fit your customer base, and therefore does both you and your customer a disservice.

The great thing about consumer financing is there really is no typical offer. Options can include installment loans, deferred interest, revolving credit, and more. The important thing is offering the best financing program to fit the proposal.

Many financing options come with no cost to the contractor, and when consumers do finance HVAC work, they generally take full advantage of it, meaning they finance for the whole amount of the project and not just a portion.

For a simple but effective way to promote financing, contractors can include a link in all their emails, directing clients to go and fill out an online application themselves. It’s more secure for the customer, and also reduces administrative time for the contractor.

Both service work and installations have the potential to benefit from financing availability. The only question left is: Do you want to grow your business and close more sales?

The answer is: offer financing options.

Contact us to review financing options available to you through Larson’s partnerships.