How to Offer Financing as a Residential Remodeling Contractor

Alright, fellow contractors, let’s talk about the elephant in the room—money. You’ve probably had this conversation a hundred times: A homeowner wants the dream kitchen, the fancy bathroom, or the ultimate man cave, but when you hit them with the estimate, they do that awkward pause, followed by, “We’ll have to think about it.” 

Translation? They can’t afford it. 

But what if you could tell them, “Hey, no worries! We offer easy financing options.” Now, instead of walking away, they’re signing on the dotted line.

Offering financing isn’t just for big-box remodeling companies. It’s one of the best ways to close more deals, grow your business, and keep your cash flow steady. If you’re not offering financing yet, you’re leaving money on the table—and let’s be real, you work way too hard to be leaving money anywhere. 

Offering financing options can significantly enhance your business's success. Studies have shown that contractors who provide financing experience an 18% increase in close rates and a 30% increase in job sizes. 

Additionally, offering financing can lead to 50% higher project tickets and more than a 20% increase in closing rates. 

By integrating financing into your services, you not only make projects more accessible to clients but also boost your sales and maintain steady cash flow.

In this guide, we’re going to show you exactly how to set up financing for your residential remodeling business, whether you go with a third-party lender or handle it in-house.

Understanding Home Improvement Financing

Financing isn’t rocket science. It’s just a way for homeowners to pay for their remodeling projects over time instead of forking over a massive lump sum upfront. For them, it means they can finally afford that dream renovation without draining their savings. For you, it means more signed contracts, bigger projects, and fewer “let me check with my spouse” moments that never lead anywhere.

Most homeowners don’t have tens of thousands of dollars sitting in their bank accounts for a remodel. That’s why banks, credit unions, and even some government programs offer financing for home improvements. 

And here’s the kicker—most people actually prefer to finance big expenses rather than pay in cash. So why not make it easy for them?

Types of Financing Options for Remodeling Contractors

There are a few ways you can offer financing:

In-House Financing

The first option is in-house financing, where you play the banker. You let customers pay you in installments instead of paying all at once. This gives you control, but it also means you’re on the hook if they don’t pay.

Third-Party Financing

The second option is third-party financing, which is what most contractors use. You partner with a financing company, and they handle the loans. You get paid upfront, and they deal with collecting payments from the homeowner. This way, you’re not chasing down late payments or dealing with financial headaches.

Personal Loans

Then there’s the personal loan route, where homeowners get a loan from their bank or an online lender to pay for the remodel. You’re not directly involved, but you can guide them toward good financing options.

Some homeowners might qualify for home equity loans or lines of credit (HELOCs), where they borrow against their home’s value. There are also government-backed loans, like FHA Title I or VA home improvement loans, which can help military families and lower-income homeowners afford remodeling projects.

Why Offering Financing Can Grow Your Remodeling Business

Offering financing isn’t just a convenience for homeowners—it’s a game-changer for your business. Many top remodeling companies provide financing because it helps them close more deals, increase project sizes, and maintain steady cash flow. If you’re not offering financing yet, here’s why you should start:

More Homeowners Say “Yes” to Bigger Projects

Most homeowners don’t have the cash on hand to fund a full remodel upfront. When you offer financing, you remove that financial barrier, making it easier for clients to commit to larger projects. In fact, contractors who provide financing see an 18% increase in close rates and a 30% increase in average project size.

You Stand Out from the Competition

Homeowners like having options, and financing can be the deciding factor when choosing between you and another contractor. If a homeowner needs financial flexibility and you’re the only one offering it, you’re far more likely to win the job.

Get Paid Faster & Maintain Steady Cash Flow

One of the biggest challenges in the remodeling industry is cash flow. Instead of waiting for customers to save up, financing allows you to get paid immediately while the lender handles the payment schedule. This reduces financial strain on your business and keeps revenue flowing consistently.

Financing Increases Customer Trust & Satisfaction

When you provide financing options, it signals to customers that you’re a professional business that cares about their needs. Many homeowners feel more comfortable moving forward with a contractor who provides structured payment options, rather than having to navigate funding on their own.

By integrating financing into your remodeling business, you make it easier for clients to afford your services while boosting your bottom line. Don’t leave money on the table—start offering financing and watch your business grow.

How to Partner With A Financing Provider

If you don’t want to handle financing yourself (and I don’t blame you), the easiest way is to partner with a lender. Look for companies that specialize in home improvement loans. You want a lender with fair interest rates, simple applications, and fast approvals—because let’s be real, homeowners get cold feet fast.

Once you find a good financing partner, they’ll typically require you to sign up as an approved contractor. This means you can offer their financing to your customers, and they handle the rest. Some financing companies even provide marketing materials and online application portals to make the process seamless.

Four Third Party Financing Options For Home Improvement and General Contractors

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Acorn Finance

Acorn Finance is a lending marketplace that allows homeowners to access multiple financing offers for home improvement projects.

• Loan Amounts: Up to $100,000.
• APR: Ranges from 4.99% to 35.99%, depending on credit.
• Terms: 2 to 12 years.
• Key Benefits:
  
  • Soft credit check for prequalification.
  • Funding in 1-2 business days.
  • No dealer fees for contractors.
  • A network of lenders for competitive rates.

Hearth

Hearth is a financing platform designed specifically for home improvement contractors. It connects homeowners with multiple lending partners to provide personalized loan offers. Here’s how Hearth works

• Loan Amounts: Typically range from $1,000 to $250,000.
• APR: Varies by borrower creditworthiness, generally starting around 4.99%.
• Terms: Loan terms can range from 2 to 12 years.
• Key Benefits:
  
  • Soft credit check prequalification (doesn’t impact the homeowner’s credit score).
  • Funds are typically available within 1-5 business days.
  • Contractors get paid upfront while customers pay over time.
  • Offers customizable payment plans that contractors can integrate into their sales process.

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Enhancify

Enhancify is another home improvement financing platform that helps general contractors offer low monthly payment options to their clients. It provides real-time pre-approvals with multiple lender options. Here’s how Enhancify works:

• Loan Amounts: $1,000 to $250,000.
• APR: Can start as low as 6.99% depending on credit score.
• Terms: Loan terms typically range from 12 months to 15 years.
• Key Benefits:
  
  • No dealer fees, so contractors receive the full contract amount.
  • Customers receive multiple loan offers in minutes.
  • Paperless application process with fast funding (often within 24-48 hours).
  • Marketing support for contractors to integrate financing into their sales process.

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GreenSky

GreenSky, a part of Goldman Sachs, provides home improvement loans through a network of banks. It offers point-of-sale financing that contractors can offer to homeowners.

• Loan Amounts: Up to $65,000.
• APR: Can range from 0% promotional financing to around 19.99%.
• Terms: 6 months to 12 years, depending on the loan program.
• Key Benefits:
  
  • Offers same-as-cash and low-interest options.
  • Quick approvals, often within seconds.
  • Mobile-friendly application for fast customer onboarding.
  • Direct deposits to contractors for easy fund access.

Each of these options helps general contractors close more deals by making it easier for homeowners to afford large renovation projects. Hearth, Enhancify, and GreenSky all offer seamless financing integrations to increase sales conversion rates while ensuring contractors get paid promptly.

Legal and Regulatory Considerations

Now, before you go offering financing left and right, make sure you’re following the rules. You don’t want to end up on the wrong side of lending laws. The Truth in Lending Act (TILA) and Fair Credit Reporting Act (FCRA) have specific guidelines about transparency and fair lending. Some states have additional licensing requirements for contractors who offer financing, so double-check your local laws.

How to Offer In-House Financing

If you want to offer your own financing, you need to have a solid system in place. Start by deciding on your loan terms—interest rates, repayment periods, and penalties for late payments. Next, check your customer’s creditworthiness because the last thing you need is someone ghosting you after two payments. Make sure you have a rock-solid contract that spells out everything in black and white.

In-house financing gives you flexibility, but it also comes with risk. If a homeowner stops paying, you’re the one eating the loss. That’s why most contractors go with third-party financing instead.

Marketing Your Financing Options to Homeowners

It’s not enough to just offer financing—you have to let people know about it! Add a “Financing Available” banner to your website, mention it in your sales pitch, and include it in your quotes. Homeowners need to know they have options before they assume your prices are out of reach.

You can also use social media and online ads to attract customers looking for affordable remodeling solutions. Highlight low monthly payments instead of the total project cost. "$199 a month" sounds way better than "$20,000 upfront."

Examples Of Home Remodeling Contractors Offering Financing

Home Remedy 

Home Remedy has “Financing” on their menu and they partner with Greensky.

FD Remodeling 

FD Remodeling has a dedicated web page outlining their extensive financing options partnered with Hearth.

Overcoming Common Challenges With Offering Financing

Not every homeowner will get approved for financing, and that’s okay. Have backup options ready, like lower-cost project phases or alternative lenders. If you offer in-house financing, make sure you have a plan for handling late payments. And always factor financing costs into your pricing so you don’t lose money on interest rates and lender fees.

Summing Up Offering Financing As A Remodeling Contractor

At the end of the day, offering financing is about making life easier—for you and your customers. 

Homeowners get the renovations they want without breaking the bank, and you get more projects, faster payments, and happier clients. It’s a win-win. So, stop letting price be the deal-breaker and start offering financing today. Trust us, your bank account will thank you.