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The Financing Option

1 June, 2020

The COVID Comeback Tip of the Week is made possible by Benjamin Moore

Can working with a bank get you more business?

It’s been postulated that a lot of painters are doing great business suddenly because people have “hit a wall” in quarantine. Literally, as in they’re noticing more and more that those walls need a new coat of paint. These same people might be reluctant to hire you due to feeling insecure about their financial future, which is why working with a bank that offers a good variety of financing options might keep you at work during our post COVID economy.

“The uncertainty of the pandemic has caused many homeowners to pause – either because of a cash shortage or to preserve cash. Payment options give homeowners a choice of how to use their money while helping them get the work done now, especially if it’s a critical need,” said Joel Cannon, senior vice president of sales and marketing, EnerBank USA, a home improvement lender.  (

The advantage of financing is that you get paid up front while the bank deals with the loan. Cannon suggests that informing people of this option in advance – on your website, for example – might increase your leads; reminding them of it when you discuss payment options might increase your chances of landing the job. “If you always look for customers who have cash on hand, you’ll miss out on a significant group of people who might be willing to do a project with you using a loan. Some contractors see their close rate nearly double by providing payment options. Our data shows they also sell bigger jobs – 44% bigger, on average,” he said.

Let the bank do the work

The job of the bank, or any finance company is to make it as easy as possible for you to do what you do best – provide high-quality painting. They’ll determine the client’s credit worthiness and they also take the risk of the client paying off the loan. Any finance company should provide you with multiple options for loans to present to the customer; you might even be able to offer same-as-cash if your bank makes that option available.

“Many banks offer instant approvals online, by phone or through an app,” said Cannon. “As part of new COVID-19 guidelines, these companies will have processes in place to reduce risk for both you and your customers through social distancing principles, while still making it easy for customers to apply.”


Pass GO, Collect $200

“We recommend painting contractors not try to function like a bank, but work with a bank to fulfill their customers’ financial needs,” said Cannon. “It’s especially important in this economy that the company you work with be an actual bank – an FDIC-insured institution – so you can be sure they have the capital required for funding your projects.” Also, he adds, try to pair up with a bank that specializes in home improvement loans, which can better match your customers’ needs.

 “As you offer payment options to your customers consistently, more of them will be able to complete projects than if you only sought out customers who you believe can pay cash,” said Cannon. “When you make offering payment options a standard part of your sales process, you’ll find a lot more customers are ready to act now.


Cannon listed some advantages of working with a bank:

  • Customers can be approved in just minutes.
  • Banks take the risk of the customer defaulting on a project. If they can’t pay, that’s the bank’s problem, not yours.
  • You focus on your business; the bank focuses on supporting you.


Here’s what to look for when partnering with a bank:

  • Satisfactory up-front training when you onboard with a loan program.
  • Ongoing dedicated support to help you navigate the loan process.
  • A comprehensive selection of home-improvement specialized loan products to meet your customers’ needs.
  • Make sure the bank has solid capital to service the loans it’s providing.


And remember, nothing is free, so many banks charge a dealer fee based on the percentage of the total project value. “That fee handles everything, including qualifying the customer and taking the risk that the customer will pay back the loan,” said Cannon. “You get paid for the full project cost minus the fee upon completion. Many contractors are very successful in building the fee into the cost of their work.”

Deposits: Trust Up Front

If your customer doesn’t want to finance, a deposit can solidify trust and earnestness on the part of the customer and the contractor, says Scott Burt of Prep to Finish Painting and Senior Editor at APC. “It definitely requires trust on the part of the customer to send a deposit for services not yet rendered, so it is critically important for contractors to make sure to prioritize and honor those commitments when scheduling,” he said.

If you haven’t asked for deposits before, he advises checking your state’s statutes for what percentage of a contract can be requested in advance. “Also, have a plan in place in the event that a customer who has paid a deposit needs to cancel the project, and make sure that customer understands that from the beginning,” he advises. If they still push for financing with you rather than with a bank, you might need to say no thanks. “My company doesn’t offer financing. I think that is probably offered by much larger paint contractors,” said Burt.

This week’s take-away tips:

  1. Offering financing options through a bank can increase your success in getting and converting leads.
  2. Make sure your bank is experienced in home improvement loans.
  3. If you’re not working with a bank, requiring a deposit offers you some protection.

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