Contractors Financing Home Improvements

Offering financing to your customers is one of the highest-leverage moves a home improvement contractor can make. It closes more jobs, increases average project size, and separates you from competitors who make homeowners figure out funding on their own. The contractors doing serious volume in kitchens, bathrooms, roofing, HVAC, windows, and siding aren't just good at the work — they've made financing a core part of their sales process. Here's how to set it up and use it correctly.

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Why Contractor-Offered Financing Changes the Sales Dynamic

Most homeowners don't have $20,000 sitting in a checking account waiting to be spent on a kitchen remodel or a new roof. They want the work done. They know they need it. But the sticker shock of a lump sum payment is the single biggest reason jobs don't close on the first visit.

When you present financing as part of your proposal — right alongside the scope of work and the total price — you reframe the conversation. Instead of the homeowner focusing on $18,000, they're thinking about $280 a month. That's a completely different decision. One feels like a major financial event. The other feels manageable.

Contractors who offer financing at the point of sale close more jobs on the first visit, see higher average ticket sizes because customers are more willing to add scope when they're thinking in monthly payments, and face less price resistance overall. It's not a gimmick — it's a sales tool that directly affects your revenue.

How Contractor Financing Programs Work

You are not the lender. That's the first thing to understand. When a contractor offers financing to a homeowner, they're partnering with a third-party lending platform that does the actual underwriting, approval, and loan servicing. Your job is to present the option, have the customer apply, and get paid when the job is done.

Here's how the basic flow works. You partner with a financing platform — more on specific options below. You present financing as part of your sales process. The homeowner applies — usually on a tablet or phone right at the kitchen table. The lender approves them in minutes. You do the work. When the job is complete and the customer confirms satisfaction, the lender funds you directly. The homeowner makes monthly payments to the lender, not to you.

Your risk is essentially zero. You get paid in full at job completion regardless of how the homeowner manages their loan. The cost to you is a dealer fee — typically 3% to 8% of the financed amount — which is the platform's cut for taking on the lending risk. You can either absorb that fee as a cost of doing business or build it into your pricing.

Major Contractor Financing Platforms

GreenSky

One of the largest and most established contractor financing platforms in the home improvement space. GreenSky partners with major banks to fund loans and offers a range of products including deferred interest promotions and longer-term installment loans. Widely used in HVAC, roofing, windows, solar, and remodeling. Dealer fees vary by product and contractor volume.

Hearth

A platform built specifically for home improvement contractors. Hearth aggregates offers from multiple lenders, which means your customer sees the best available rate from several sources rather than a single lender's product. Contractors can use Hearth's tools to send financing offers via text or email before the appointment, which warms up the financing conversation before you even walk in the door.

Mosaic

Primarily focused on solar and energy efficiency projects — HVAC, insulation, windows, roofing with energy components. If your work intersects with energy improvement, Mosaic is worth looking at. They offer competitive rates on longer terms because the loans are tied to energy savings.

Synchrony Home

Synchrony is a major consumer finance company with a strong presence in home improvement. Their contractor program offers revolving credit products and promotional financing options. Widely recognized by consumers which can help with credibility at the point of sale.

Regions | EnerBank

EnerBank, now part of Regions Bank, has been in the contractor financing space for decades. Strong in HVAC, roofing, windows, and remodeling. Known for reliable funding timelines and contractor-friendly processes.

Local and Regional Credit Unions

Some credit unions have contractor partnership programs that offer competitive rates to members for home improvement projects. If you operate in a specific geographic market, it's worth exploring whether local credit unions have programs you can partner with. The rates are often better for the consumer than national platforms, which makes the close easier.

Building Financing Into Your Sales Process

Offering financing only works if you present it consistently and confidently. Contractors who mention it as an afterthought — "oh by the way we also do financing" — don't see the same results as contractors who build it into every proposal from the start.

The right approach is to present financing alongside your proposal as a standard option, not a fallback for customers who can't afford the job. Something like: "Most of our customers use our financing program — it keeps cash in your pocket and lets you get started right away. Here's what the monthly payment looks like on this project." Frame it as a smart financial decision, not a rescue option for people who are short on cash.

Train everyone on your sales team to present financing the same way. Inconsistency in how financing is offered leads to inconsistency in results. Make it a standard part of the sales script and review it in every proposal.

Also consider pre-qualifying customers before the appointment. Platforms like Hearth allow you to send a financing pre-qualification link via text before you show up. The customer checks their rate, sees they're approved, and the financing conversation at the appointment becomes a formality rather than a hurdle.

Financing as a Competitive Differentiator

In most home improvement trades, the majority of contractors don't offer financing or offer it poorly. That gap is an opportunity. When a homeowner is getting three bids and two contractors hand them a lump sum price while you hand them a monthly payment alongside your proposal, you've changed the comparison entirely.

You're no longer competing purely on price. You're competing on convenience, accessibility, and the overall customer experience. A homeowner who would have shopped around to find a cheaper option often stops shopping when one contractor makes it easy to say yes right now.

This is especially powerful for larger ticket projects — full kitchen remodels, whole-house HVAC replacements, complete roof replacements, bathroom additions. Projects where the sticker price is enough to make a homeowner pause, delay, or reduce scope. Financing removes the pause.

HELOC and Second Mortgage Referrals

Beyond direct contractor financing platforms, some contractors build relationships with local mortgage brokers or banks who can help homeowners tap home equity for larger projects. A HELOC — home equity line of credit — or a cash-out refinance can fund a $60,000 to $100,000 renovation project at rates significantly lower than a personal installment loan.

You're not arranging the financing yourself in this case — you're referring the customer to a trusted lending partner. The homeowner gets better rates on a large project. You close a job you might have otherwise lost. Your lending partner gets a referral. Everybody wins.

This works best for large remodel projects where the financed amount is significant enough that the lower interest rate on a HELOC makes a meaningful difference in the monthly payment. For smaller projects under $25,000, the speed and simplicity of a platform like Hearth or GreenSky usually makes more sense than sending the customer to a bank.

What It Costs You and How to Handle the Dealer Fee

The dealer fee — the percentage the financing platform charges you for each funded loan — is a real cost that needs to be accounted for in your pricing. Fees typically range from 3% to 8% depending on the product, the promotional terms offered to the customer, and your volume with the platform.

On a $15,000 job with a 6% dealer fee, you're paying $900 to the platform. Whether that's worth it depends on whether you would have closed the job without financing. If the answer is probably not, then $900 to close a $15,000 job is an easy decision. If the customer was going to write a check regardless, offering financing cost you $900 unnecessarily.

The cleanest approach is to build your dealer fee into your standard pricing across the board. If you know your average dealer fee runs 5%, price your jobs accordingly so that when financing is used the fee comes out of your margin rather than being an unexpected hit. Some contractors offer a small cash discount to customers who pay without financing — effectively passing some of the savings along while still protecting their margin on financed jobs.

Watch Out: Deferred Interest Products Can Damage Your Reputation

Here's something that catches contractors off guard. Some financing platforms offer deferred interest promotional products — "no interest if paid in full within 12 months" or similar. These products are attractive to customers at the point of sale because they hear "no interest" and assume it's a 0% loan.

It's not. Deferred interest means if the customer doesn't pay the full balance within the promotional period, they get charged all the interest that accrued during that period — retroactively from day one. A customer who made minimum payments on a $12,000 loan for 11 months and then misses the payoff deadline can suddenly owe $2,000 or more in back interest.

When that happens, the customer is angry — and they're angry at you, not the lender. Their financing experience became a bad experience and your reputation takes the hit. Be careful about which products you push to customers. True 0% installment loans are cleaner and less likely to generate complaints. If you offer deferred interest products, explain exactly how they work before the customer signs. A customer who understands the terms and manages them correctly is a happy customer. A customer who got surprised is a one-star review.

Bottom Line

Offering financing to your home improvement customers is one of the smartest business moves you can make as a contractor. It closes more jobs, increases average project size, and gives you a competitive edge over contractors who make homeowners figure out funding on their own. Partner with one or two reputable platforms, build financing into every proposal as a standard option, account for dealer fees in your pricing, and be careful about the products you offer. The contractors doing the most volume in home improvement aren't just the best at the work — they've made it easy for customers to say yes.

Related Contractor Finance Resources

Main Contractor Finance Guide — Your complete guide to financing options, strategies, and tools built specifically for contractors.

Home Builder Construction Loans — If you're moving beyond improvement work into new construction, this covers how construction lending works for builders from the ground up.
Short Term Loans for Contractor Cash Flow Gaps — For managing your own cash flow while waiting on draws and customer payments, this covers the fast-access capital options available to contractors.

Tip: If your financing platform offers a pre-qualification link you can send before the appointment, use it every time. A customer who already knows they're approved walks into the sales conversation in a completely different mindset than one who hasn't thought about financing yet.