Joe Garcia, Senior Business Development Manager of National Sales
Joe Garcia, Senior Business Development Manager of National Sales

Swimming pools are a significant investment. Three key factors influence their affordability: the interest rate, the loan amount, and the length of the loan term. Personal loans can make this financial commitment easier by providing customers with a low monthly payment option without the stress of complicated financing. Here, Joe Garcia, senior business development manager of national sales for Lyon Financial, answers questions on personal loans and financing so pool builders can guide homeowners into making the financial decisions that can make their backyard dreams a reality.

Q: What are the differences between a personal loan and a home equity line of credit (HELOC)?

A home equity line of credit (HELOC) works like a credit card, providing borrowers with a line of credit based on their home's appraised value, which serves as collateral. HELOCs usually have variable interest rates and a set repayment period, but fluctuations in interest can be a concern. The approval process can take four to eight weeks, depending on the lender and location.

In contrast, a personal loan is an installment loan not tied to any asset. With fixed interest rates and faster processing times, personal loans require less paperwork than HELOCs, making them a convenient option for accessing funds quickly.

Q: What qualifications are required to get approved for a personal loan for a pool?

Every financial institution has its own criteria, but two critical factors for personal loans are the credit score and the debt-to-income ratio (DTI). These elements affect loan approval chances as well as the interest rate, loan term, and available funds. By identifying the best lending opportunities for your clients, you can improve their chances of securing favorable terms, allowing them to move forward with confidence.

Q: Is financing available for my clients' projects beyond just pools?

Most financial institutions provide loan solutions that go beyond just a basic pool. They understand the rising demand from buyers who aspire to transform their backyards into luxurious retreats.

Q: How can I incorporate financing into my business to attract more leads?

When customers express their intention to pay with cash, builders often overlook the importance of presenting financing options. However, introducing financing can reveal that monthly payments may be much lower than customers expect. This newfound understanding can inspire them to explore additional features and upgrades, enabling them to envision a more expansive project. Ultimately, this approach not only enhances customer satisfaction but also increases the average invoice amount for contractors, benefiting everyone involved.

Always present financing options to your customers; it's a common misconception that everyone pays in cash. Make sure to include a financing tab on your website and add a link to financing in your email signature. By offering financing information, you can significantly enhance your customers' buying power—typically increasing it by 20 to 30 percent.

Q: What is the best strategy to encourage customers who are hesitant about a pool to decide to move forward?

Be confident when recommending financing and highlight how crucial the monthly payment is for your customers. Leverage the tools available from certain finance providers to break down monthly payments in a clear and detailed manner. Exceptional financing opens up possibilities for customers, helping them understand that they can create the backyard of their dreams instead of simply accepting a more limited option due to budget constraints.

Q: Customers often ask when the best time to buy a pool is. What is your opinion on that?

Interest rates will always fluctuate, but it's important to understand that the costs of pool construction typically increase by an average of 3-5% each year. For such a significant investment, these rising costs can add up quickly. By deciding to move forward with their purchase now, pool buyers can enjoy their pool for a longer time and ultimately spend less overall, maximizing their investment.

Q: What special programs for customers should I inquire about with my financing partner?

Ask about military programs that can enhance your business, especially if you’re a builder focused on pool construction in high-demand states like California, Texas, and Florida, which host a significant number of veterans. These military customers often appreciate incentives that honor their service. By collaborating with a financing partner that provides such benefits, you can effectively close more deals and attract a loyal clientele.

Q: What fees can my customers expect when taking out a personal loan?

Many financing partners charge an administrative fee to pool buyers, which helps cover their operating expenses and provides a revenue stream. It's important to be aware of potentially high fees, as they can discourage potential customers. If your clients view high fees as a standard practice in the industry, it may significantly hinder your ability to close deals. Additionally, make sure to inquire about prepayment penalties. While these are generally less common in personal loans compared to home equity lines of credit (HELOCs), they can still apply.

For more information about offering financing, visit lyonfinancial.net.