[Rex Mann]

We are thinking about offering financing to our clients for our projects. On the surface it seems like a "no-brainer". I project it could potentially add about 20% to revenues.

This is the scenario I see:

They do not have the budget, however, they have the means to acquire the monies to do the work. Moreover, we can get them exactly the amount they need in a timely fashion, and because we offer the financing we score the project.

Has anyone used a quality third party to fiance client's projects, if so, what are the pitfalls, drawbacks or benefits?

Or should I just qualify the potential clients budget better before the initial meeting.

Peace,

Rex





ArizonaPavers.Com

[Bill Schwab]

Rex:

If you are going to carry paper, join a credit reporting agency like trans union and make sure you pull reports before offering financing, and also report when they fall behind. We let our bank do home equity for clients, and in years past we used Northwest finacial. They offered 90 days same as cash, you got paid in 3 days of completion, and if the client was 91 vdays on a payment, they were made to pay 100% of the interest for that 90 days.

[agla]

Accept credit cards. You get paid and it is someone else's problem to collect, run credit checks, ....

People will make big purchases with a credit card that they might not without. This includes upsells.

[PSUscaper]

Belgard was pushing its contractors on this notion a few years ago, as I believe other paver manufacturers were also.

The biggest problem I had with it was the interest rate was rediculous.......in all reality, it would be cheaper/the same for the client to just put it on their own credit card instead.



Which leads me to what AGLA says....if anything, I would accept credit cards first as a 'trial'. Personally, I think the old saying of "I'm a landscaper, not a bank" is stretched enough as it is........why invite people to cause problems when they already create enough already!

Also, with the rock bottom interest rates on home equity loans now, I can't see why a client would want to even bother with some sort of financing plan when they most likely could get a much better rate that way.

And if they can't get a home equity loan, they can't get another loan, and they don't have the money to pay..............then I really don't know if working for them in the first place is a good idea, none the less give them a loan................

[Stonehenge]

I've wondered about this - how many potential clients out there have credit limits that would allow for a full landscape installation?

[jwholden]

The banks are willing to give a home equity under 25K on a handshake and about 50 signatures. I'm sure a higher amount is possible without much more trouble and good credit.

I often get paid by my clients from an investment account. If I give a heads up on when I need the money, something is sold to pay for the expense. Otherwise they write the check straight from their investment account.

I havn't ventured into looking into financing for my clients because, frankly, I think they are better at getting financing than me. I would wonder about how qualified of a client they are if they can't find the funds for the project themself.

[justgardens]

I have worked with a local Credit Union and bank to offer financing for clients at the Home Show or tell them about the availability when doing the initial visit. My sister-in-law runs the Credit Union , my husband runs the bank I use( nothing like keeping it in the family. I send the client to them ,the financial institution does the rest. I got the idea when I went to a garden tour where one of the gardens had a banker there to offer loans to anyone interested in doing a landscape at their own home. I loved the concept. At our last Home Show I let everyone attending the seminars they could see the Credit Union who had set up a special plan with us to do landscaping. Many people are now putting large purchases on credit cards for the points or airline miles. I may have to start taking credit cards again. I quit because only one person in 10 years used one. Times are definately changing on how people finance landscape projects but I still like a good old fashioned check.

[agla]

"I've wondered about this - how many potential clients out there have credit limits that would allow for a full landscape installation?"

I freaked out a couple of years ago when I saw the credit limit on one of my credit cards. I had a very modest income, but the card would have paid for one hell of a landscape. I had them reduce the limit. It was rediculous.

I think that you might find that credit limits are very high. It might be different for business owners that have been doing a lot of "writing off", but for you average Joe with a madest steady income that does not miss payments, limits are quite high.

You should exploit, ... I mean utilize that. An added ammenity that they get excited about is a much easier upsell when they can use plastic rather than making a full payment by check.

[Bill Schwab]

We have clients that carry a $250,000.00 BALANCE, not limit, Balance! Leaves me to ask the question what the hell am I doing wrong here? LOL

[Chuck Sinclair]

We offer it thru John Deer, they do all the paper work we get the job and paid what we bid it at.

[Rex Mann]

I have no intention or desire of carrying the paper on the finance. I would use a third party as Chuck does.

I did the credit card thing back East, and some years we took maybe 3 or 4 most years none.

We are just looking at this as a marketing tool and a selling tool.

If it can help sell jobs and provide a good ROI with minimum headaches then we will try it.

Thanks for all the input.

Peace,

Rex

Now Offering Financing?

[GLAN]

We do credit cards......it has helped in getting paid on the maintenance side of the business. And several upsell, small design work over the years....

I am considering the John Deere financing for a marketing tool

My neighbor is a plumber by trade and with his partner they do remodelings in the city...like Brookly and Queens.........He has told me the only way he gets work is to provide financing. They don't finance thier own work..........but I never discussed it further with him.