- Photo Courtesy of Richard Phillips
Finding the right financing partner can be the first step towards building a lucrative pool business. But knowing what kind of partner works well means understanding what types of loans are offered, when you are paid and by whom, and walking customers through the benefits of taking out a loan. We sat with Carla Barrera, Director of Business Development and Elite Program at Lyon Financial, to understand what it means to introduce financing and what to look for when finding a financing partner.
1. What types of loans are available for pools?
There are two types of loans: secured and unsecured. Secured loans rely on leveraging the equity of a home, often referred to as a second mortgage. Unsecured loans are based on creditworthiness alone and are not tied into a second mortgage.
2. My customers pay cash. Why should I offer financing?
While your customers may not ask about financing, chances are most actually aren’t paying cash. Nearly 75% of homeowners with a project costing over $2,500 are being financed. If a builder doesn’t offer financing, their clients who need it may not find it on their own, which means they risk losing deals. Financing can be a great tool in these uncertain times, where homeowners can hold onto cash for investments or any emergencies that arise.
3. How would offering financing benefit me and my business?
Builders who are offering financing find it easier to close a sale. It is easier to sell a monthly payment rather than the whole cost of the pool. It’s a lot easier for homeowners to envision themselves in that pool when all they must do is make that monthly payment. Financing is also an effective way to upsell products like patios, tile upgrades, water features, extended decks, outdoor kitchens and more.
4. What should I look for in a financing partner?
Builders should select a company with a reputation for success, professionalism, and longevity in the industry. Look for a partner with exceptional customer service, transparency especially with fees, and integrity in how they do business. A quick internet search can be very helpful in making a decision, especially via the Better Business Bureau (BBB). We also recommend making an “old-fashioned” phone call to see how responsive a potential partner is; this first impression can tell you a lot about a company.
5. Why is it important for builders to work with a financing consultant who has experience unique to pools?
The pool industry has its unique challenges and not every financing consultant is familiar with the needs of the industry. The contractor should find a financing partner who has experience in not just pool financing but pool construction. Pool construction can be lengthy at times and there could be unforeseen circumstances that arise. For example, you may hit rock, need funds for concrete or for additional project materials. In those cases, you need a partner who can help navigate such challenges.
6. How can I incorporate financing into my sales pitch?
Financing doesn’t have to be a hard sell. Mention that you offer financing options and include a brochure. You can provide your clients with resources like a payment calculator, which does a great job showing customers how affordable a pool can be once broken down into monthly payments. Once you refer your clients to your financing partner, the financing partner should be able to take it from there and take care of your customer.
7. How does it work when my client finances a project? How do I get paid?
While every finance provider is different, most operate by either giving the money to the homeowner directly, or by paying the builder directly. If the money is given to the homeowner, then the burden is on the homeowner to pay the builder appropriately. This is where some issues can arise.
More stability is afforded to the builder if they are paid directly. In this scenario, funds are tied into the project. There is a level of comfort for both the homeowner and builder when funds are managed by a third party.
For more information, visit www.lyonfinancial.net
