Contractor Guide
How to Offer Financing as a Contractor
Want to close more deals and win bigger projects? Offering financing to your customers can increase close rates by 30-50%. Here’s everything you need to know about adding financing options to your contracting business.
Quick Facts for Contractors
- Close rate increase: 30-50%
- Avg project size increase: 20-40%
- Setup time: 1-3 days
- Cost to join: Free (most platforms)
Quick Answer
How to offer financing as a contractor: partner with platforms like Wisetack, GreenSky, or BuildFolio. Integrate into sales process. Train team on presenting payment options. Increases close rates 30-50%.
Why Contractors Should Offer Financing
If you’re not offering financing to your customers, you’re leaving money on the table. Here’s why financing has become essential for home improvement contractors:
Close More Deals
Studies show contractors offering financing close 30-50% more deals. When customers can spread payments over time, the “yes” comes easier.
Win Bigger Projects
Average project sizes increase 20-40% when financing is available. Customers upgrade from “good enough” to “exactly what they want.”
Beat the Competition
Only 30% of contractors offer financing. Having payment options gives you an immediate edge over competitors who only take cash or credit cards.
Get Paid Faster
No more waiting for customers to save up or take out their own loans. Financing companies pay you directly, often within 1-3 days of job completion.
Reduce Cancellations
Pre-approved financing locks in the customer. They’re less likely to get cold feet when their payment plan is already set up.
Sell More Add-Ons
“For just $20 more per month, we can also…” becomes a powerful upsell tool when customers are already thinking in monthly payments.
Real Numbers from Contractors
A 2024 survey of 500+ contractors found that those offering financing reported an average revenue increase of $47,000 per year compared to those who didn’t. The top performers saw increases of $100,000+.
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Start Offering FinancingHow Contractor Financing Works
Offering financing is simpler than most contractors think. Here’s the process from signup to getting paid:
Getting Started (One-Time Setup)
Choose a Financing Partner
Compare platforms like GreenSky, Wisetack, Service Finance, or BuildFolio. Consider loan amounts, approval rates, fees, and integration with your workflow.
Apply as a Dealer/Merchant
Complete the dealer application (usually online). You’ll need your business license, tax ID, and banking information. Most approvals take 1-3 business days.
Train Your Team
Learn the app or portal for submitting applications. Most platforms offer training videos and sales scripts. The learning curve is minimal—most contractors are up and running in an hour.
Using Financing on Every Job
Present the Financing Option
When quoting a job, mention: “This would be about $X per month with financing.” Frame it as a monthly payment, not a total price.
Submit the Application
If the customer is interested, use your tablet or phone to submit their application. They’ll enter their basic info and SSN for the credit check.
Get Instant Approval
Most customers get a decision in under 2 minutes. They’ll see their approved amount, rate, and monthly payment options.
Complete the Work
Once the customer signs the financing agreement, you can start work. The financing is locked in—no risk of the customer backing out due to payment issues.
Get Paid
After the customer confirms job completion (usually via the app), funds are deposited to your bank account within 1-3 business days.
No Collection Hassles
Once the financing company pays you, you’re done. They handle all billing, collections, and customer service. If a customer misses payments, that’s between them and the lender—not you.
Compare Contractor Financing Platforms
Here are the most popular financing platforms for home improvement contractors:
| Platform | Max Loan | Dealer Fee | Best For | Funding Speed |
|---|---|---|---|---|
| GreenSky | $65,000 | 0-15% | Large projects, established contractors | 1-3 days |
| Wisetack | $25,000 | 0-9% | Small-mid jobs, easy setup | 1-2 days |
| Service Finance | $100,000 | 0-12% | HVAC, roofing, windows specialists | 1-3 days |
| Synchrony | $75,000 | 0-14% | Retailers, Home Depot/Lowes partners | 1-3 days |
| BuildFolio | $50,000 | 0-8% | General contractors, remodelers | 1-2 days |
| Mosaic | $75,000 | 0-10% | Solar, energy efficiency | 2-5 days |
What to Look for in a Platform
- Approval rates: Higher is better. Some platforms approve 70%+ of applicants, others only 50%.
- Loan limits: Make sure they cover your typical project sizes.
- Dealer fees: Lower fees = more profit for you. But lower-fee programs often have lower approval rates.
- Promotional offers: 0% APR options can be powerful sales tools, but they cost you more in fees.
- Integration: Does it work with your CRM or job management software?
- Customer experience: A smooth application process reflects well on your business.
Consider Multiple Platforms
Many successful contractors use 2-3 financing platforms. If a customer doesn’t qualify on one, you can try another. This maximizes your approval rates and gives customers more options.
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Get Started FreeCosts and Dealer Fees Explained
Understanding the cost structure is critical to pricing your jobs correctly when offering financing.
How Dealer Fees Work
When a customer finances their project, the financing company pays you the full project amount minus a “dealer fee” (also called “merchant discount”). This fee varies based on the loan terms:
| Loan Type | Typical Dealer Fee | Example on $10,000 Job |
|---|---|---|
| Standard Rate (12-18% APR) | 0-3% | You receive $9,700-$10,000 |
| Reduced Rate (8-12% APR) | 3-6% | You receive $9,400-$9,700 |
| 0% APR for 6-12 months | 6-10% | You receive $9,000-$9,400 |
| 0% APR for 18-24 months | 10-15% | You receive $8,500-$9,000 |
How to Handle Dealer Fees
Contractors handle dealer fees in three main ways:
- Build into pricing: Add 5-10% to all quotes to cover potential financing fees. This is the most common approach.
- Cash discount: Offer a discount for cash/check payments. “It’s $15,000, or $14,000 if you pay cash.”
- Absorb on large jobs: On a $50,000 kitchen remodel, a 5% fee ($2,500) might be worth absorbing to close the deal.
The Math Usually Works
If offering financing helps you close 30% more jobs, the dealer fees pay for themselves many times over. A $1,000 fee on a $10,000 job is better than losing the $10,000 job entirely to a competitor who offers financing.
Other Costs to Consider
- Monthly fees: Most platforms have no monthly fees. A few charge $25-$100/month.
- Minimum volume: Some platforms require minimum monthly volume to maintain your account.
- Equipment: You’ll need a smartphone or tablet. No specialized hardware required.
- Marketing materials: Most platforms provide free signage, stickers, and digital assets.
Frequently Asked Questions
How do contractors offer financing to customers?
Contractors partner with financing companies like GreenSky, Wisetack, or Service Finance. When a customer wants financing, the contractor uses a tablet or phone app to submit the application. The customer enters their info, gets approved in minutes, and the financing company pays the contractor directly after work is completed.
How much does it cost contractors to offer financing?
Most financing programs are free to join with no monthly fees. Contractors pay dealer fees of 0-15% depending on the loan terms offered. Standard rate loans have 0-3% fees, while promotional 0% APR offers cost 8-15%. Many contractors build these fees into their pricing.
Does offering financing increase sales for contractors?
Yes, significantly. Studies show contractors who offer financing see 30-50% higher close rates and 20-40% larger average project sizes. Customers who can pay over time are more likely to approve add-ons and upgrades.
What credit score do customers need to get approved?
Most financing platforms approve customers with credit scores of 600+. Some programs like Wisetack approve scores as low as 550. Approval rates vary by platform, but typically 50-70% of applicants are approved for some amount.
How quickly do contractors get paid?
Most financing platforms pay contractors within 1-3 business days after the customer confirms job completion. This is often faster than waiting for a check to clear or chasing down final payments.
What happens if a customer doesn’t pay the financing company?
Nothing happens to you. Once the financing company pays you for the job, you’re done. Any collection issues are between the customer and the lender. You’ve already been paid in full.
Can I offer financing for any type of project?
Most home improvement projects qualify, including HVAC, roofing, windows, kitchens, bathrooms, flooring, siding, and general remodeling. Some platforms have restrictions on certain project types or minimum amounts (usually $1,000-$2,500).
What’s the best financing platform for contractors?
It depends on your business. GreenSky offers the largest loan amounts ($65K+) for big projects. Wisetack has the fastest setup and lowest fees for smaller jobs. Service Finance specializes in HVAC, roofing, and windows. Many contractors use multiple platforms to maximize approval rates.
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