Understanding the HVAC Financing Process: A Step by Step Guide for Contractors
Understanding the HVAC Financing Process: A Step by Step Guide for Contractors
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When a customer needs a repair on his or her HVAC system, they call you to come out and fix the problem. If a customer wants to install a new HVAC system in his or her residence, they reach out to you for a quote.
Sometimes you book the job, sometimes you don’t. In most cases, the reason why you weren’t hired was likely due to the cost of the work. Despite your exceptional customer reviews and fair rates, the customer decided to seek out the services of your competitor. That revenue could have gone towards helping to grow your business but, unfortunately, your competitor brought in that income, putting their business on an upward track towards success.
So what happened? You’re a popular local HVAC contractor with a positive track record and thousands of happy customers who recommend your business to others. Your prices are commensurate with market rates and you offer top-quality work, why isn’t that translating into steady revenue and consistent cash flow?
You may be asking yourself these very same questions. But here’s one fact that may hold the answer: A majority of your customers can’t afford to cover the costs of your services by paying cash upfront in one lump sum. Many of them simply don’t have the available funds to access when their heating and cooling system stops working or they need a new air conditioning unit installed before the dead of summer hits.
That leaves your HVAC business in the lurch and when you keep failing to convert sales on service calls to customers who need repairs or installations performed, you may find yourself out of business before long.
But there is a solution: Financing options through Fund My Contract can help you generate more revenue to grow your business by giving your customers more choices when it comes to paying for the work when the bill is due.
How Financing Helps Customers Hire Your HVAC System Services
Working with a field service finance company like Fund My Contract can help reduce the barriers to conversion that come with price objections and hesitant customers who can’t afford the work they need you to perform on their HVAC systems.
The main hurdle comes from the customer’s inability to pay all at once at the time of the transaction. It’s an expense that he or she wasn’t anticipating, comes at the worst possible time, and the customer can’t afford to fit it into their budget. So the customer goes without and so does your business.
No repair job means no revenue generated.
But when you work with Fund My Contract, our vast network of third-party lenders can work with your business to develop and offer a variety of HVAC system financing options that allow your customer to pay for the work across low monthly payments instead of all at once.
We have worked with many HVAC companies and understand the specific challenges within the industry these service providers face and our network of third party lenders can tailor financial solutions that fit your customers best by catering directly to their needs.
Some of these programs can offer the customer a fixed monthly payment that fits seamlessly with their monthly budget constraints, other programs may offer competitive interest rates or a zero interest promotional period for those who qualify, and many of these financing plans feature flexible loan terms that give the customer more time to pay back the amount being financed.
The Benefits of HVAC Company Financing
Financing makes the cost of your services more affordable and allows for a wider customer base to hire your business. Not everyone can afford to pay in one lump sum and furthermore, you’re empowering your customers to flex their purchasing power when they can pay over time. This results in higher invoices as your customers feel more comfortable increasing their spend with your HVAC installation business. Customers are more likely to book routine HVAC maintenance appointments with the deluxe package over basic servicing.
Best of all, the waiting game is over as HVAC financing options are presented to the customer at the time an estimate or bid is submitted. The decision to hire your business can be made much faster when the costs of the work are more affordable and don’t require an upfront, all at once payment when the transaction is complete.
The HVAC Financing Process: How it Works
When you choose Fund My Contract as your service finance company, our network of third party online lenders are dedicated to one goal — helping you grow your HVAC company at your pace and on your terms. The cost of a new HVAC unit can be thousands of dollars, that is a daunting number for many customers who just want to heat or cool their homes when the temperatures get extreme. Financing options through Fund My Contract can make those numbers more manageable on an installation and payment plan.
Fund My Contract helps you reduce installation costs and simplify the approval process for customers who need HVAC financing but don’t want to take out a home equity loan from their bank or pay higher interest rates and fees to obtain a personal loan with a credit union.
Fund My Contract is the better solution with faster approvals for customers with excellent credit or a less than favorable credit score because our criteria differs from that of traditional lenders and financing institutions.
Answer the Service Call, Diagnose the Customer's Problem
When your HVAC company receives a service request, you want to be fully prepared with all of the tools needed for solving the problem at a fair price. You show up to the customer’s residence or place of business to examine the issue and diagnose the reason why the HVAC system isn’t working properly. Whether it’s a minor adjustment or a major repair you want to be upfront and honest about the reason for the dysfunction and offer effective solutions to solve the problem.
Let’s say it’s the latter and your customer is facing a pretty significant repair. You may propose installing a whole new component of the HVAC system instead of overhauling the old one, especially if the cost of repair is higher than installing a new model that works more efficiently.
Once you present the customer with the best option, the estimate for the work is provided and the cost may run hundreds if not thousands of dollars to fix. For homeowners without home warranties or another option to defray these costs, that estimate can be alarming to say the least – particularly if it’s an expense that has taken your customer by surprise.
Present HVAC Financing Options to the Customer
Fund My Contract’s network of third party online lenders can work with you to present the most unique and innovative financing programs in the HVAC industry today. When you have chosen the lender with whom you would like to partner, you develop the ideal financing plans that support your customers and their spending habits. You know your customers best so you can give our lenders the information they need to extend financing options that will urge them to make quicker, more assured decisions when the time comes to hire your business to perform a much-needed repair or replacement of one or more primary components of a faulty HVAC system.
When you or one of your representatives has diagnosed the problem with the customer’s malfunctioning HVAC unit and presented the best solution to fixing the problem along with an estimate for parts and labor costs, the response may be characteristic of most customers who find out they need to spend a substantial amount of money that wasn’t accounted for in their monthly budget.
Now is the time where you or your representative offer more solutions to the customer’s current concerns in the form of HVAC financing options that can make the cost of the goods and services more affordable. Instead of paying thousands of dollars upfront, the costs can be split up over lower monthly payments that can fit within any budget
That will make the customer feel a whole lot more comfortable hiring your business on the spot without the need to “think about it” and go days or even weeks without a response, if you even get one from the customer after waiting patiently for a reply.
Review the Financing Options Available
The customer might feel somewhat overwhelmed by the task at hand and the costs associated with the repair or other work they need done on their HVAC system. As you present the financing options you offer, you can sit down with the customer to describe the various features and benefits of the programs to see which one fits best.
Low monthly payments over a set period of time is typically attractive to customers who want to defray the high costs of a repair but others may choose to pay higher monthly payments to get better interest rates or an extended term of reimbursement.
During this time, you can answer any questions or concerns the customer may have about the financing process and what is expected. Finally, once all the options are presented, the customer chooses the financing program or programs for which he or she would like to apply.
Initiate the Application Process
Using our simple online portal, the customer can access the application and fill out all of the necessary information that is required. Credit history and credit score, while important, play less of a contributing factor in the approval decision of the lender than banks or credit unions. That’s because Fund My Contract uses additional factors such as employment history, household income, amount needed for financing and other criteria to determine which financing programs the customer may be eligible to access.
The approval process is quick and a customer can find out in minutes if he or she is approved and at what terms and conditions. Fund My Contract has simplified the approval process because customers don’t want to wait around knowing they have a considerable expense ahead and there are other HVAC contractors in the area who are eager for the new business.
Schedule an Appointment to Perform the Work
Your business has been hired to do the job, congratulations! Now you and your team secure the parts and perform the labor for which you’ve agreed with the customer. Meanwhile, the customer is ready to receive the funds needed to pay you for the job. But what if there’s a last-minute change of plans? Perhaps the customer ultimately decides not to move ahead with the work as scheduled. Something’s come up and you’re not fully aware of the reason behind this 11th hour switcheroo, but there’s one thing you can be sure of — if the customer doesn’t wish to continue with the job for which you have been hired, the financing agreement is canceled. The customer does not receive the money.
This is called “closed-loop financing” and this policy ensures that your business is the only one that benefits from offering financing options to your customers. Should the customer elect not have you perform the work, the funds are not transferred and the agreement is rendered null and void.
Fund My Contract wants to make sure that your business succeeds, not someone else’s when you have offered our financing programs to your customers.
Otherwise, if the customer continues to move forward with hiring your services as originally planned, your business receives payment in full when payment is due. The customer may be making monthly payments on that amount but your HVAC company doesn’t need to wait to get the full cost of services. You get paid in full, on time. The lender receives payments as outlined by the financing agreement.
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