Whether their product is consumer goods or HVAC systems, I have two words that are the bane to all salespeople: consumer debt. These two words impact consumers’ ability to buy things.

The New York Federal Reserve’s Quarterly Report on Household Debt and Credit for the first quarter of 2014, showed a $129 billion increase in household debt from the previous period. The good news is that economists believe this increase is a hopeful sign. It suggests consumers are confident enough to boost their purchases by borrowing.

In a 2014 article published in Inc. magazine, Vince Passione, founder and CEO of LendKey — a cyber-based personal finance organization — wrote that Americans are warming up to using plastic again. The the use of revolving credit, like credit cards and other unsecured loans, jumped by more than 12 percent in April 2014, he noted.

A survey from December 2015 by GOBankingRates.com showed that about 62 percent of Americans have less than $1,000 in their savings accounts. It also showed that 21 percent don’t even have a savings account.

Today, consumer spending remains strong. HVAC contractors who offer financing make it easy for customers to buy what they need or want. Using someone else’s money is important in today’s economy, since so many consumer budgets are stretched thin. By providing access to special financing, homeowners can buy the system they need without tying up other forms of credit.


While many HVAC business owners recognize the money obstacle in the sales process, they often don’t fully understand how a consumer credit program can help them increase sales. There are plenty of reasons for this, including:

  • Lack of time to research the benefits of a financing program;
  • Misunderstanding of how such programs actually work; and
  • Uncertainty about how to implement a program within their businesses.

Some contractors believe financing programs cut into profits. Again, this is probably based on a lack of knowledge or time to investigate. They are overlooking the positive impact a financing program can have on their cash flow.

On the other hand, spreading expenses out in monthly payments is an easy concept for consumers to understand. Monthly payments are a way of life and affect the way Americans eat, work, and buy.

Furthermore, according to market research cited on the EnerBank website, 50 percent of all home improvements in excess of $5,000 are financed in some way. In other words, if you aren’t offering customers financing options for their home improvements, you could be leaving 50 percent of the business on the table.

Of course, not all consumer credit is pristine. Consumers can find themselves in the uncomfortable position of being turned down for credit. As you all know, that is a sales killer. But, it doesn’t have to be. There are financial institutions that specialize in what the industry calls second-look programs.


A second-look program allows customers with less-than-perfect credit to qualify for financing.

For example, consumers living in severe-weather environments need heating and cooling. Many cannot afford to replace their systems and can’t find primary financing because of credit issues. They continue to repair older, inefficient systems, and remain burdened with higher-than-necessary utility bills.

According to spokespeople at Turns Financing Services Inc., many homeowners applying for financing have FICO scores below 640. “We’re still able to find financing for many of them,” says Bob Maisel, senior vice president of business development for Turns. “We’re currently approving approximately 40 percent of the applications that have been turned down by primary finance providers.”

In today’s challenging economy, businesses are very competitive. You need to have more options at your disposal to close the sale. Offering primary and secondary financing options allows customers to make payments that fit their budgets. Meanwhile, you get your money up front and grow your client base, sales, and company.


Consumer financing programs can be one of the most important items in your sales toolkit. But when should you bring financing up with your customers? Do you wait until they ask about it? Do you bring it up in the middle of conversation?

Many salespeople will tell you that most consumers never ask about it. They also say there are two reasons why customers will not ask you about financing:

1. Pride — According to Wendy Mootoosingh, director of sales of home improvement financing, Crelogix, some consumers feel that asking for financing implies they can’t afford their purchase and would rather avoid asking because of that. She says, “Although it’s socially acceptable to finance a vehicle or a home, there is a perceived stigma in financing other purchases, such as a new roof, furnace, driveway, or home improvements.”

2. Buying habits — Mootoosingh said that because of the first reason, buyers who prefer financing tend to shop around for product or service providers who obviously offer financing. The more obvious it is that financing is available, the less their pride is threatened by asking for it.”

To overcome these two objections, Mootoosingh said, contractors should offer financing as the preferred method of payment. “Make sure you highlight your financing programs ‘front and center’ during every sale. Customers need to know they have financing options available while they’re shopping. Advertise financing on your website and in your email communications,” she says.

She adds that you can overcome salesperson reluctance by conducting role-playing exercises with your sales team and by filling out sample credit applications.

“A one-hour meeting with your salespeople should be more than enough to teach them everything they need to be successful using a credit program.”


Another powerful tool for contractors is the concept of lease-to-own financing. Such programs are popular in Canada and are making their way into the U.S., said Turns’ Maisel. “It is becoming much more relevant.”

He adds, “Approvals are usually based on the customer’s ability to repay the loan.”

To make things even easier, Turns currently offers a lease-to-own program having low contractor costs. Maisel says the typical contractor cost is around 5 percent. “Contractors can move from prime to subprime financing without having to drop their margins.”

Application decisions are made within minutes, he said, adding that lease-to-own approval rates are typical higher than traditional second-look financing.

If you don’t currently offer consumer financing, you should consider it. Consumer financing can help you win the hearts of customers and lessen their financial burdens. In today’s marketplace, you have to help your customers buy from you. If you want to grow your company and excel in the HVAC business, consumer financing should be your salespeople’s — and your bottom line’s — best friend. 

Publication date: 10/17/2016

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