When Susan Parnell and her husband, Larry, branched out and started Canyon Oak Pools back in April, the one thing that she says launched them into immediate financial success was offering financing.
“We have 38 pools that we've already sold, and I would say, probably
75-80 percent of those … is financed,” Parnell says. “It’s a good clip of pools for us.”
Financing, she says, made it possible for customers to buy into the backyard concept they really wanted – not just compromise on adding a swimming pool. They are able to add a beautiful patio, lighting, outdoor kitchen, firepit, pergola, pool upgrades, a hot tub, the works.
“It's much better financially for you [the customer] to let us come in and tear up your backyard one time, instead of doing [one thing] now and then coming back next year,” Parnell explains.
People tend to pay for pool and backyard projects through any number of ways: from savings, on credit cards, by taking out a second mortgage on their home, or through personal loans. Financing offers easy loans to buyers who might be unwilling to fork over a large amount of cash or whose money would fare better in the market. Particularly in economic times when interest rates are relatively low, it makes more financial sense for customers to keep their cash elsewhere and take out a loan to finance a backyard project that can be easily paid back on a low-cost monthly basis. This way, customers can walk away happy with their backyard transformation, rather than feeling mediocre.
“The incremental cost to go from good to great is pretty minimal,” says Charles Claffey, president of the Pool and Hot Tub Association and owner of Claffey Pools in Southlake, Texas. “What we tell people is if you build an environment, you're going to get every dollar back.”
Explaining to the client what’s involved in financing is important, to walk them through and make them comfortable with the process, says Britt Godfrey, a manager at Lyon Financial, which specializes in loans for pool building. The concept of taking out a loan can be “a little scary. So we like to break it down and make it easy for people to see what they can afford on a monthly payment, and what that is over the life of their loan. They then realize that it’s not going to be exorbitant to finance their project.”
When selecting a financing partner, the client should interview a few and what’s involved in the underwriting process, including fees, timeline to approval, and milestones, which is when builders would receive payment if the financing partner is the type, like Lyon Financial, that will pay the builder directly. Other financing partners may drop the loan directly into the client’s account and the builder would work with the client to make sure they are paying on time.
As a result of financing, Parnell says one customer ended up doubling their budget once they realized getting a loan was an option. They came in wanting their backyard spruced up with a patio and kitchen and ended up adding a pool.
“Financing comes into play so much on this, because even if they are really financially prudent people, and really want to try and pay cash for their pool, nobody minds financing another forty, fifty thousand dollars,” Parnell says. “And then through the build process, you'll see them sharing things on their social media … watching their dream become a reality.”
For more information on partnering with a financing company, visit Lyonfinancial.net.