How to Offer HVAC Financing to Customers
Today, the demand for HVAC financing is forcing service providers to reconsider the finance solutions they provide to customers.
It cannot be denied: the stats have said it all.
Credits. U.S Energy Information Administration
From as early as 2015, a report shared by the U.S Energy Information Administration indicated that air conditioning represented 12% of home energy expenditure in American households.
Today, Statista claims that the global HVAC market size will be valued at $367.5B by the year 2030, a figure which represents a significant projected upward trend in the years leading up to 2030.
With air conditioning already constituting a significant portion of American households’ budget, service providers now have a fruitful and remunerative opportunity to boost service orders and allow homeowners to access the projects they need in a more affordable way.
In this article, we will dive into more information concerning what HVAC finance plans usually cover, the main benefits they offer to HVAC companies, and how these businesses can become lenders today.
Let’s get started.
An Overview of HVAC Financing
HVAC financing is a line of credit granted to a property owner or homeowner to cover the cost of projects or work related to heating, ventilation, and air conditioning.
To be more concrete, this funding is geared towards dealing with expenses on systems that deal with cooling and heating (like air conditioners and energy-efficient/energy-saving cooling systems) indoor and outdoor areas. HVAC systems also filter and purify indoor air, maintain high standards of air quality, and keep humidity levels at a healthy and comfortable degree.
For this reason, HVAC services are rendered to both residential and commercial clientele since both audiences need cooling, heating, and ventilating needs all-year-round.
HVAC financing projects include those which involve outdoor piping, heat pumps, ductwork, installation of equipment or AC units (be it geothermal, mini-split, retrofit, multi-stage, single-stage, and two-stage air conditioning unit). However, on occasion, they may also lend themselves to other types of work that may not necessarily be considered pure HVAC projects such as window installation or home comfort systems.
HVAC financing is a costly home improvement initiative, and most people cannot bear the full brunt of the economic blow.
For that reason, they often turn to financing options.
What HVAC Financing Brings to Lenders
Delivering HVAC financing solutions to homeowners and property managers alike promises serious profit gains and lucrative benefits to the lending company.
Some of the major benefits that lenders can obtain from this special financing include:
- Increasing your service orders: Due to the elevated costs of HVAC work, homeowners tend to be discouraged to partner with HVAC service providers who force them to pay in full. Instead, they usually gravitate towards those who offer alternative finance options since that affords them greater freedom with their finances. Consequently, having HVAC finance options increases the chances that clients will want to hire you for their next project.
- Being competitive in the face of your adversaries: HVAC service providers are everywhere you turn. If you want to be competitive and stand out among your competitors, the best way is to deliver attractive finance solutions that make clients want to use your services.
- Reach more segments of your target audience: Along with the boost in service orders, providing funding for HVAC projects also opens up the way for you to explore new markets that you wouldn’t have necessarily targeted. This is because the introduction of a new financial service means that you have greater chances to capture new market segments as you expand what you offer to customers.
The Dangers of Traditional HVAC Financing Plans
At present, those homeowners who have sought financing offers for their HVAC projects have mainly been exposed to service providers who offer either one or more of the following options:
- Unsecured personal loans
- Secured personal loans
- Home equity loans
- Home equity line of credit
- Cash-out refinance
- Credit cards
However, despite the seemingly numerous options that exist, all of them present some major inconvenience or represent a serious concession to those who elect to leverage them:
- High-interest rates: Unsecured personal loans are known for making the credit approval process easier since they require less supporting documentation. However, the downside is that the interest rate is often so high that it’s a huge deterrent for clients.
- Unfavorable terms and conditions: When lenders draft up the terms and conditions of the loan, in most cases they cannot be modified and most importantly, they hardly take into account the specific financial needs of neither commercial nor residential clients. As a result, in most cases, the terms and conditions of these loans, be it in terms of the repayment dates or monthly amounts, are unsuitable to borrowers and do not ease their financial stress. What’s more, if you have an existing bad credit score, that can seriously hurt your chances for a loan.
- Capped credit limits: Most lenders have a non-negotiable maximum amount that borrowers can request. Needless to say, those borrowers who need more than the requested amount find themselves at a loss since the finance plan they are requesting does not meet their specific needs.
In short, the most evident problem is that traditional finance plans do not meet the specific demands that current customers have.
Now, the improved version of these plans lies in the flexible finance plan, one which grants the borrower more freedom in their payment options.
Here’s how you can deliver them to your clients with Time Investment Company.
Time Investment Company for HVAC Financing
Time Investment Company (TIC) is a private family-owned finance company with over forty (40) years in the business of creating unique and compelling finance solutions for businesses and their clients.
We specialize in creating flexible finance options for companies that operate in the HVAC niche.
That includes service providers who install air conditioning systems and even full HVAC units (among others).
We work directly with companies just like you to build captivating finance plans that provide an answer to the need for comfortable financing on HVAC projects.
Through TIC’s solutions, your customers make a deposit in their HVAC loan and clear the remaining balance in fixed monthly payments all at an overall lower interest rate than what they would get from a traditional plan.
Being a close-knit family-run business, we value the concerns, needs, and demands of both clients and their customers. It is for this reason that we go the extra mile by sitting with you and fleshing out the best possible plan for your customers.
At present, we have partnered with over 250K businesses and funded more than $775M successfully-repaid loans.
Be our next success story and connect with a business that places you and your customers first in the quest for all-around better financing.
Takeaways for HVAC Financing
All in all, the best way to remain competitive and pull in more income is through HVAC flexible finance plans.
If you’re looking for a path to these kinds of solutions, TIC is poised to help you.
Reach us via (800) 236-1177 to discover how you can start offering these types of finance plans for your customers today.