Prepping for the Unknown of 2021 Part 4: Financing 101 for 2021 – Broaden Your Reach, Eliminate Fees, and Layer into Your Sales Process

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2020 has been a hurricane of good and bad for everyone. Thankfully, the home improvement industry has seen year-over-year growth of over 20%. 2021 is shaping up to be a complete unknown, though, with unclear job growth reports and a virus that has completely disrupted our lives.

Hearth has compiled the best national organizations, industry gurus, and top contractors across all components of home improvement, to deliver a 4-Part webinar series that can serve as a playbook for the best-practices to ensure a successful 2021. We’re covering everything from successful lead generation, to selling systems, to saving timing and money on the tedious operations of your business.

Part four of our series, Financing 101 for 2021 – Broaden Your Reach, Eliminate Fees, and Layer into Your Sales Process, happened this Wednesday 12/9/20. It was a lively discussion with industry leaders on how and when to offer financing to your customers.

The Panelists:

  • Steve Weyl – Founder of ABLE 444-ROOF, Sandler Sales Coach

  • John Esh – President, Joyland Roofing

  • Anthony Ghosn – Co-Founder/CEO, Hearth

  • Moderator: James Waite – Head of Partnerships @ Hearth

Industry Trends

With COVID-19, the macroeconomy and everyday habits are changing—and quickly. As a smart contractor, you have to know what’s coming. Urban flight is a big deal, and it’s happening at an increasing rate.

Who are the bulk of these new homebuyers across the country? Millennials, with an average age of 31. They’re the fastest growing population of homeowners there is—in 2019, they made up 36% of homeowners; now, it’s 40%. They’re also buying old houses with a median age of 37 years old because that’s what’s in stock. Materials are in short supply for new homes.

Millennials expect technology to make processes easier for them, from buying a home to seeking improvements. The data shows that every other buyer demographic is starting to mirror the expectations of this future generation of consumers.

And why do Millennials decide not to buy from someone? Lack of transparency. Says Steve, “If you can’t clearly communicate to the homeowner what you’re going to do and have a repeatable process that builds confidence in the pitch, you come across as not knowing what you’re talking about.” If you offer financing from a single lender that disappoints your customer, that will also reflect poorly on your own credibility.

Unsurprisingly, you’re also competing with other contractors. 92% of people get more than one quote. They’re doing their homework. The more tools you have in your kit to give you a competitive edge and stand out, the better.

Positioning Consistency

John Esh advised us that as a homeowner, “you don’t know what you don’t know.” Because of that, contractors should always offer financing, not just as a way to overcome objections. It can’t hurt to let clients know the option is available. Not everyone will choose it, but at least they know their options. In fact, financing may also result in higher revenue for you. People who choose financing tend to take on projects of 30% higher value than cash buyers.

Steve Weyl shared that the percentage of ABLE’s business on the residential roofing side in 2020 is 30%. Financing has exploded over the past few years. Financing customers tend to select more premium products, whereas cash customers are tighter on their budgets.

According to Anthony Ghosn, how far off a customer is from a transaction also matters. Timing is key. If they’re just shopping around for contractors, weeks away from pulling the trigger, the likelihood is low. But if they’re already running through estimates, they will think seriously about how they’ll be paying for it, hence, financing.

One of the things contractors have said for years is, “Our customers don’t need financing.” But the data says otherwise. Rather than asking prospects you’ve just met, “Do you need financing?” and potentially embarrassing them, let them know that you have two types of customers: one type that prefers monthly payments, and one type that prefers to pay up front. It’s that simple.

That’s how you introduce financing. Especially in the early sales process, it’s a human reaction not to want to signal that you need financing, especially to a stranger. “Monthly payment options” sounds and feels a lot more comfortable for your customers.

Multiple vs. Single Lenders

After COVID-19 hit, many lenders raised their credit score requirements for loans. Some even went out of business. If you offered just one or even a small handful of lender options to your clients, tough luck. Platforms like Hearth allow for diversification in getting quotes so that you aren’t relying on a single lender with few options.

John advised that having multiple lender options is, just by nature, bound to be better. It’s a win-win. If your customer is not approved by one, they could still get approved by any of the others. This works even better when it’s a single application. Having to ask a homeowner to reapply with your second-look lender can be an uncomfortable conversation bound to lose you the deal.

On the contrary side, Steve shared that trying to maintain multiple lender relationships yourself raises your overhead. And the simpler your business, the more profitable it will be. Platforms like Hearth allow you to provide multiple lender options without the hassle.

Expenses in Financing

Lenders used to pay contractors to send customers to them. Now, lenders make contractors pay them fees for the service of providing loans.

Lenders told John to up his company’s rates by 15% to make up for the fees’s affect on his margins. But how many customers were they losing by raising their prices to compensate? Hearth has allowed his company not to worry about lost business.

As Steve advised us, “There is no free lunch. As a homeowner, if you have a low credit score, you’ll have to pay one way or the other.” With some lenders, contractors can buy down the rate by paying the lender a bunch of money, but contractors don’t absorb that cost. They instead just add it on to the price of the job, so it doesn’t end up saving homeowners in the long run. Your customers might as well know what they’re paying for rather than hidden fees.

James suggested that if you tiptoe around financing for folks with lower credit scores, they’ll be shocked by the APRs they see. Instead, shape your financing conversation around what the homeowner can afford for monthly payments, rather than focusing on APRs.

John said that homeowners should consider improvements an investment worth the expense. There’s a reason why they want to get the work done now. Wherever they go, they will see rates—financing isn’t free. What matters most is whether or not the monthly payment they are offered is affordable.


Steve advises that every home improvement business should have a repeatable, proven, trainable sales process that’s baked in and mentions financing options as “monthly payments” every time. Don’t let your sales people act independently and repeat their same mistakes over and over. Leads are expensive and sometimes hard to come by, so don’t let them go to waste.

To conclude the webinar, Anthony left us with one last piece of insight: “I have never seen a contractor who has learned how to start financing and then stops offering financing.” Learning how to talk about financing—or, as we’ve learned, “monthly payment options”—will help you win more business. It’s that simple.

For full access to the content we covered, the recording can be found here.

You can also learn more about getting started with Hearth here.

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