Home improvement is an important service, allowing homeowners to avoid catastrophic issues with their home or pull the trigger on a long-awaited upgrade or addition. While anybody who owns a house would love to get work done in a timely manner and make their home as nice as possible, the bill that often comes along with a contractor’s service can lead to hesitation.

Luckily, it is easier than ever for contractors to offer home improvement financing to their customers. This means that their clients can fix issues before they get worse or upgrade to the home of their dreams without having to wait until they have all of the cash on hand. All that contractors have to do is partner with the right fintech provider or lending source.

To help make this happen, we are going to go over the basics of getting involved with consumer financing, and the steps to take, which include:

• Consider what financing options work best for your market
• Find a partner that offers them
• Contact and deploy

Consider What Financing Options Work Best

Every industry targets a different type of customer, purchase size, delivery timetable, and purchase frequency. These three factors largely determine what kind of financing makes sense for the consumers in that industry.

For contractors, consumers are usually over the age of 25, the size of the bill is typically around the 5-figure range, and they operate on longer timetables than most other purchases. This means that the frequency of purchase tends to be low, with new projects not typically coming from the same customers multiple times in the same year.

As a result, contractors looking to offer home improvement financing to their consumers should provide both consumer loans and buy now, pay later (BNPL) financing.

Consumer Loans

The more traditional financial products of the two, consumer loans typically break up a purchase into payments over the course of 12-36 months. An interest rate is applied annually to the balance allowing the lender to make money by paying out the contractor right away and collecting payments with interest from the consumer.

BNPL Financing Programs

BNPL financing programs are similar to loans but are far more flexible and accessible. This is because BNPL typically carries low-to-no-interest and has variable payment periods ranging from simple four-payment structures to loan-style plans that can extend over a year. Also, BNPL doesn’t report to credit bureaus the same way a loan does, meaning that the credit impact is minimized, making consumers more open to taking financing.

Find a Partner That Offers BNPL and Consumer Loans

There are many lenders and fintech firms that are open to partnering with contractors to give their consumers more ways to pay. While big banks are great for consumer loans, they tend to lag behind on more modern financial solutions like BNPL.

This is where fintech providers come in. There are several well-known fintech firms (like Klarna, Affirm, and Afterpay) that provide BNPL with their own funds, giving consumers easy access to this new payment option. Although, their limitations are based on the fact that they don’t have the same access to funds as the big banks, and their risk tolerance is lower. This means they will not always be able to finance high-end purchases or low-credit consumers.

Skeps has worked to create a product that mitigates these limitations by partnering with an entire network of trusted, established lenders. This allows us to give contractors and their consumers access to a much larger pool of funding, and a wider variety of underwriting requirements, allowing for far more flexibility.

Offer Home Improvement Financing With Skeps

Skeps offers a comprehensive, end-to-end consumer financing program that helps businesses modernize their entire payment process. We go above and beyond one-click payment, also offering a one-click application process for several different types of consumer financing, including:

• BNPL
• Consumer loans
• Branded credit cards

Our platform is customizable, the easiest to deploy, and the most flexible option on the market. So if you’re looking to partner with a forward-thinking fintech company that will keep consumers' eyes on the purchase while offering best-in-class financing, Skeps is the perfect fit.