How to Choose the Right HVAC Financing Plan for Your Business Needs
Published September 09, 2024
How to Choose the Right HVAC Financing Plan for Your Business Needs
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HVAC contractors who offer financing options can generate revenue faster, increase customer satisfaction, and enjoy more robust business growth in a shorter period of time. But knowing how to develop and promote the right financing plans can make all the difference in enjoying the full advantages of those programs for building your business.
Let’s take a look at some of the most important factors to consider when choosing the right financing plan that best suits your contracting business and your customers alike.
What Customers Want
First and foremost, the best financing programs cater to the needs of your customers. More often than not, the average homeowner can’t afford to pay for the work they need done in cash. They simply don’t have the funds available to cover the cost upfront. Homeowners with faulty HVAC systems are almost always caught off-guard when repairs are necessary. The costs of parts and labor are unexpected expenses that might have the customer living without heating or air conditioning until which time the resources are available. But there’s no telling how long of a wait that may be and while the customer is saving up to hire your services, your business isn’t generating revenue. Not to mention that your customer is living in a residence lacking temperature-controlled comfort.
HVAC business owners know their customers best. So when it comes to providing financing options to your customer base, you can focus on including the features that will cater to their needs. Whether it’s a program that offers flexible terms, low monthly payments, or competitive interest rates for those who qualify, you can offer financing options that will get your customers’ attention and give them more opportunities to hire your HVAC company.
How You Plan to Offer HVAC Financing Options
HVAC business owners who want to start giving their customers access to financing typically have two choices: In-House Financing or Third-party Financing.
In-House Financing Options
When your HVAC services company offers in-house financing, that means you are also the lender. Your business is offering customers HVAC loans in some capacity where you are directly responsible for extending credit to those customers. You may offer that financing in the form of a loan or a deferred payment arrangement in which you or your HVAC technicians perform the work and the customer makes payments due on the parts and labor along a pre-arranged plan. This also means that your business is in charge of managing cash flow, collecting reimbursements, and chasing after unpaid invoices and late payments.
As an HVAC business owner, you need to ask yourself if you have the knowledge and the resources to offer in-house financing and perform work as an HVAC contractor. This role will inevitably put you in the position of a collections agent in the event your customers default on the payments you are owed.
Third-Party Financing Options
The other choice is third-party financing which means you work with a third-party lender who handles all of the financing for you. The lender is responsible for ensuring that every step of the financing process goes smoothly for all parties involved. That means the lending company handles the application, the documents, the funding of the amount, and collecting the reimbursements. Your role in the process is to offer financing programs to the customer who will then select the program he or she prefers and, once the amount is funded, you perform the work needed, be it an HVAC replacement job or installing a new HVAC system, or repairing faulty or old HVAC equipment.
As an HVAC contractor, you get to focus on running your business and leave the financing to professional lenders. You know the HVAC industry inside and out, third-party lenders know the lending industry just as well. Working together can help your business grow and expand faster than ever before.
At Fund My Contract, we’ve been helping turn struggling HVAC companies into successful HVAC businesses through our innovative and unique approach to contractor financing, our network of third-party lenders have been working with small and large businesses to fuel faster growth and accelerate robust expansion.
A Simple and Streamlined Application Process
When HVAC companies offer financing options to their customers, they do so for the purposes of making the costs of parts and labor more affordable and easier to fit into their monthly budget. Financing can also give your business an edge on the competition. This is particularly useful in a busy region where there are many HVAC contractors all doing business and vying for income from the same customer pool.
That can make it tougher to attract customers and get them to hire your services. In a competitive HVAC market, you need to do everything you can to stand out and offering financing can give your HVAC business a much needed edge on the other guys down the street.
But customers can also be fickle. They know they have many choices in a crowded field of service providers and they will compare prices among those HVAC contractors with the best reviews and, yes, the lowest rates. So when a customer contacts your business, wants to hire your services, and intends to participate in one of the financing plans you offer, the last thing you want is for the customer to be turned off or discouraged by the application process. That means working with a financing entity that understands your time is valuable, your customer’s time is even more precious, and the longer the customer is forced to wait to receive the funding needed to proceed with the HVAC work, the greater the possibility he or she may move on to another provider.
That puts revenue in your competitors’ businesses and your business goes without.
Customers want a fast application process and a quick response on approval. Finding the right financing plan means working with a lender who examines more than a customer’s credit rating to determine whether or not they can access the funding they need to hire your business. Banks and credit unions want to know if the customer has a good credit score and an excellent credit history. Fortunately, there are online lenders who take other factors into account such as employment history, household income, and debt-to-income ratio, just to name a few, so your customers can get approved for the money they need to get their HVAC systems repaired or replaced when necessary.
Financing That Gets Your Business Paid Fast
Choosing the right HVAC financing plan means ensuring your business gets paid quickly, in full, upfront when you have performed the work for which you were hired. Customers who apply for and get approved for financing on HVAC work enter into an agreement with the lender to receive the money they need and make monthly payments on those funds along a set schedule that is outlined in the agreement.
Even though your customer is making installment payments on a monthly basis, your business receives the cost of the parts and labor in full at the time services are rendered or the transaction is completed. Your business should never be forced to wait to generate revenue and financing gives your business the opportunity to bring in that income while your customer gets to pay for the work over time along a monthly payment plan.
Customers who can’t afford to pay for the work in one lump sum usually find that financing options give them more access to the HVAC providers who can repair an HVAC unit or replace parts that come with hefty price tags when finances are at a premium.
Another thing to consider – be sure that when your customer is approved for financing, the funding he or she receives can only be spent with your business, not someone else’s. This is called “closed-loop financing” and it means that your business (and only yours) benefits when the customer is approved for the financing program you have offered through your HVAC company.
You’ve done the work of creating a financing program option, advertising that financing to customers, and given them access to the most efficient online application portal in the consumer financing space.
Your business should be rewarded for all of that effort – not someone else’s business.
This allows for your HVAC business to help out more of your customers and grow your business in the bargain. Offering flexible financing programs and high-quality HVAC services increases customer satisfaction and that puts your business in a much stronger position to attract more potential clients and generate more revenue.
Fund My Contract is the HVAC Company Financing Leader
Any business that is facing financial challenges must find ways to maintain their operational efficiency while meeting customer expectations. For HVAC business owners, that means working with a financing entity that understands the challenges that come with running a small business in a crowded marketplace and customers who can’t always afford to pay for the work they need to be done.
When choosing the right HVAC financing plan, turn to Fund My Contract. Our network of third-party lenders has a wide range of financing options that fit your business and the customers who rely upon your services. When you work with our lenders, you help to develop financing options that cater to your clientele so they can access the funds necessary to hire your business and help it grow.
On your terms. On your timetable.
Flexible financing options, low monthly payments, promotional interest rates, fast approvals, a streamlined application process, and closed-loop funding are just some of the many reasons why Fund My Contract is the most trusted financing partner for HVAC businesses like yours.
Third-party financing that allows you to run your HVAC business and puts the approval and funding processes in the hands of lenders who have the expertise and resources to give your business a boost. All you have to do is continue working with your HVAC customers who have grown to trust your business as a leading authority in the HVAC industry.
Do you think HVAC financing can work for your business? Contact us today. One of our consumer financing experts will walk you through the membership process, explain how our network of lenders can assist in developing the financing programs you choose to offer, and answer any other questions you may have about HVAC financing.
Are you ready to increase revenue and grow your business? Then what are you waiting for, call Fund My Contract and let’s get started on putting your HVAC company on the road to success.
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