Financing 101

By Brandon Swearingen, regional business manager for Lennox sales team

The story is too often told. After a sales call, the homeowner on the other end of the line pauses, breathes deeply, and ends the call with the dreaded phrase, "Let me think about it and get back to you." That response isn't an objection; it's a deflection. Your price may be right, but there was no offer of a financing alternative presented. That little phrase has cost many a dealer a job because what the homeowner is really trying to do is figure out how they are going to pay for it.

For a consumer, purchasing an HVAC unit is a big investment, and it's one that, in my experience, only 10% of consumers have the cash on hand to pay up front. Any time away from the customer is time that can hurt your sale. As we're all in the business of comfort, it only makes sense to make the entire HVAC buying process as easy and comfortable as possible for our customers even before a single unit is installed.

Offering financing for customers greatly increases the chance of a sale, and in some cases can lead to approximately a 65% increase in the ticket size. On average, customers who pay in cash spend approximately $5,000 for a unit, while customers who finance their purchases spend almost $8,000 for a unit on average.

Unfortunately, many dealers are hesitant to offer financing due to some common misconceptions (e.g., "My customers always pay cash and don't need financing," "It costs too much to offer financing," or even, "It's too complicated and involves too much paperwork."). In reality, financing could be the boost your business needs. While a check generally requires two to three days to process and actually deposit money into your account, financing can provide you with the payment the same day.

Service Finance Company, the preferred U.S. financing partner of Lennox Industries, found that 70% of homeowners intend to finance (even the ones who are able to pay cash up front for a job ticket); and if you're not offering a financing solution, most likely your prospects will find someone else who does.

Guest blogger Brandon Swearingen is a regional business manager for Lennox Industries.


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