Building a profitable and successful business should be the goal of every air conditioning, heating, and refrigeration company. At the inaugural Service World Expo, Oct. 25-28 in Las Vegas, industry leaders will share their advice on how to reach that goal.

One easy way to immediately boost sales is to implement an effective financing program to bring customers in the door and ensure you close the sale. Throughout my 25 years in the home improvement space, I’ve seen dramatic increases in sales, revenue, customer satisfaction, referrals, and employee retention, which start with effective, tiered financing programs. While I will be in Las Vegas to share all of the ways financing is essential for HVAC contractors, here is a preview of my presentation: “How to Use Financing to Close Sales.”


When financing options are offered, closed sales increased by 10 percent and installation tickets increased by 25 percent, said Matt Michel, CEO and president of Service Roundtable, referencing statistics from a national distributor.

Moreover, when a finance program is tiered with an option called second-look financing, the type we facilitate at Fortiva Retail Credit, sales teams are able to close 25-50 percent of the sales first-tier lenders couldn’t approve for credit reasons.

“Given the overhead involved in closing a sale, including marketing, initial contact, house visits, and actually selling the unit, HVAC companies can’t afford to have a low close rate,” said Richard Clarke, chief sales and marketing officer at Sanford, Florida-based Del-Air. “One of the easiest ways to improve the close rate is to make it easier for customers to make the purchase.”

The direct impact these closed sales have on profit margins is great, yet a strong financing programs ability to bring customers in the door cannot be overstated, especially given the urgency of most heating and cooling purchases.

“Most people replace their mechanical systems out of necessity,” Clarke says. “There’s an urgency to the purchase, which can create a lot of anxiety. It’s great to give customers peace of mind with new systems and quality service, but the ability to offer and clearly explain favorable financing options is a major part of making the customer comfortable. Financing is a way to let people live with safety and comfort today by borrowing for future comfort, as well.”

Failing to offer financing options can keep customers from even considering your business, especially because customers are typically thrown into the market unexpectedly when their systems break. In this common scenario, customers don’t have the time to save money to pay for a unit or service, especially in extreme climates.


When developing or improving a financing program, Michel strongly cautions against choosing only one provider, so you can offer options that work for your customers’ individual situations. A tiered program that incorporates both a prime and a second-look financing provider is recommended.

There are several ways to install prime lending options. Many financial institutions offer retail credit options directly with HVAC contractors, such as Enerbank, Synchrony Financial, or Wells Fargo. Alternatively, many manufacturers set up financing plans with financial institutions, which can then be offered directly to the customer by the contractor. These prime finance options typically offer great, low-payment terms that attract business and approve customers with FICO scores above 670.

To save sales for customers who are interested yet fall below the prime credit score, many contractors also use second-look financing. Second-look providers, such as Fortiva Retail Credit, are able to approve customers with lower FICO scores using proprietary underwriting systems that look at additional qualifying data and approve customers with scores of 550, in some cases. If a prime financing provider declines credit to a customer, the salesperson can then recommend the customer apply using the second-look program to improve his or her chances of qualifying and, more importantly, getting the heating or cooling unit he or she needs. Because multiple reports find that approximately half of Americans have subprime or near prime credit scores (between 620 and 680), incorporating a second-look option opens the door for HVAC sales teams to significantly expand their customer bases. As previously noted, second-look financing can lead to approved financing for 25-50 percent of customers who were denied by the prime lender (depending on the region), which leads to significantly more satisfied customers.


By implementing a full financing program, contractors are able to offer customers a range of payment options, which can bring their business to the door and make customers comfortable when making such purchases.

“About 30 percent of customers will use our 12-month, no-interest minimum-payment plan to free up money in the short-term,” Clarke says. “Another 25 percent of the overall buying public will use credit for the longest period and lowest monthly payment they can make. These customers are on fixed incomes and often think of their lives in terms of monthly payments. They don’t mind taking more debt, but just have to keep purchases affordable.”

It’s essential to diversify the type of providers in a financing program by integrating second-look financing. “I’ve always recommended second-look financing. If a prospect is turned down for financing, it’s a lost sale,” Michel says. “Not only can second-look financing save the sale, but it gives HVAC retail sales professionals the confidence to attempt financing in the first place.”

In addition to this confidence, sales professionals see a healthy step up in pay considering second-look financing. In most cases, overall financing revenue increases 10-20 percent. This added profit also pays dividends in terms of reduced employee turnover. By adding a second-look financing option, my previous employer reduced annualized turnover by 27 percent in the first year.


Financing is crucial when it comes to keeping up with technological advances in the industry. With new inverter technology and other advances in comfort, Clarke predicts costs will increase as well. A good financing plan will be an essential element to extend the price so customers can break even based on their future energy savings.

“As we extend our biological necessities into our environment, just as we are through extensions of voice and hearing, so too can the house recognize that you’ve left and turn the heating or cooling system off to keep the house ready,” Clarke notes. “Through geofencing, the unit can tell you’re a mile away and turn on.

“Energy savings and comfort derived are absolutely worth the monthly fees from financing, but the industry will have to have customers open their pocket books and be willing to spend $40,000 to enjoy these advanced systems. That’s not going to happen unless you’re smart about financing.”

Michael Fredricks is the senior vice president of business development for Fortiva Retail Credit. For more information, contact him at (770) 828-1001 or

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