What do you consider expert service? Is it good communication, quick response time, easy scheduling, a professional staff, going above and beyond for the customer, and quality equipment?
What about offering multiple payment options, such as cash, credit cards, or financing through an installment loan?
Kelsi Cooper, an inside sales manager at FTL Finance, and Andrew Lockman, an account executive at FTL, discussed customer financing on Jan. 24 with attendees at the 2024 AHR Expo in Chicago.
They noted that the average U.S. credit score (FICO) hasn't increased; in 2022, 20% of FICO scores decreased by at least 20%.
"It's alarming across all FICO ranges," Lockman said.
While HVAC contractors may prefer customers with high credit scores, he noted they may be missing opportunities with those with lower scores. Those homeowners may not have enough money in their bank accounts or on their credit cards to pay for a needed repair or replacement – contractors can maximize financing by offering it to this "underserved market."
Cooper explained that financial institutions like FTL are considered prime lenders (lending to consumers with credit scores between 660 and 719) and near-prime lenders (lending to consumers with scores between 620 and 659).
Subprime lenders serve the underserved market (credit scores between 580 and 619). They also look at more than credit scores.
Customers who apply for these contractor financing programs and don't qualify for prime or near-prime loans will have their applications sent to a subprime lender (no additional application required.)
"Choose a lender with options to cover a range of credit scores," Lockman added.
They concluded that every homeowner deserves the option of a loan, even those with low credit scores. "It's not a scarlet letter," Cooper added.