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Financing for Painting Contractors That Wins More Jobs
When selling large projects, financing for painting contractors is essential to increase your closing rates. If you aren’t offering financing options yet other painters are, you stand to lose a certain percentage of projects every year.
However, most large finance companies can take 7-14% of your project in “fees” which can cut into your personal income. In this training, we teach painting contractors how to offer financing for painting projects. Plus, we have a very special offer exclusively for painters that can be accessed here: https://www.paintersacademy.com/finance
I’m excited to have y’all here. I know this time of the year, the month of July, is the busiest for estimate requests of the entire year nationwide and we get a lot of folks that will watch this recording instead of tuning in live. I want to get this for posterity because we’re talking about something that is critically important and that is how to offer financing to boost sales and closing rates. I’ve had a lot of conversations with many of you about financing. We discussed it at The Painting Profits Summit. Wanted to cover this in detail and I’m going to walk you through some of the things I learned along the way trying to select a provider that I felt like would be a good fit for you, and then also how to implement it.
What you’re going to discover today is how financing moves the income needle. We’re going to talk about being honest regarding your sales process and the client’s needs, how to implement financing into your PowerPaint Presentation Process, a partnership that I would like for you to explore, and then we’re going to take questions. For those of you who haven’t been here before, the thing that we do is I keep everybody’s lines muted until the very end unless you’re presenting simply because with GoToWebinar as a platform, and we may move to Zoom, it just creates a lot of feedback. We’ll take questions at the end. If you have any of those, just hang on to them and we’ll come to you.
The big thing about financing is simple, and that is it really helps move the needle with a certain percentage of your client base or potential client base. You don’t really know what percent it is that will take financing and use it, and as we speak later with Alex and Noah, maybe they can shed some light on this. If you want to write down a note, Alex, about percentages of projects that are often financed and circle back to that when you present, that will be great.
Just as an example, if you write 500 estimates and let’s say that there are people that are on the fence, they want to use you but they can’t quite afford you. Maybe you’re more expensive than your competitors, maybe they just have a cash flow issue, maybe they’re in some of the categories of client type that we’ll talk about in a moment. You have to assume that a certain percentage of deals will close if you offer to break down the principle into smaller payments than if you didn’t have an option at all. Options when it comes to paying for things increase conversion.
Let’s say if you’ve got 12% more that you close and your average transaction size is 5750. Now, you may say, “Why 5750, Brandon? Isn’t the average paying transaction around 3,000 to $3500?” For most of you across the U.S., that’s about accurate. For those of you in rural or rather urban areas, it’s going to be higher, but most of your finance projects are likely to be larger projects. The bigger the number gets the more likely people are to finance it. Again, this is just a projection.
Well, if that’s the case, then that’s $345,000 in more sales. If you’re at that cash flow-to-owner number that I like you to be at, which is around 30%, you’re going to see $103,000, it should be, in personal income. If you go all the way down to just 7.5%, which is just 37.5 more jobs, it’s still $215,000 in sales and it should still be $64,000 of personal income. Why do you want to look into financing? Well, just because of the income numbers. It’s pretty simple, income and growth.
Now, who wants financing for painting contractors? There are people that want financing and there’s some people that will not care for it, will not entertain the option or are only going to look at the cash price, but our first group of people are those who are living the payment lifestyle. I mean, everything is on a payment. House is on a payment, car is on a payment, furniture’s on a payment. Tuition to their schools that they send their kids to is on a payment, vacation home’s on a payment. Everything’s on a payment. I’m a big advocate in your personal life of being debt free, but one thing I continually remind you of is that you’re not your client. You are not your client, and to project your feelings on your client is always a mistake in marketing and sales.
Then, there are those who want to preserve cash. Maybe some people feel comfortable having 60, a hundred thousand, 10,000, $20,000 in the bank, and they need to do the project but they’re not going to get into that emergency money. This is something they want to do and so they go, “Why not?” Or maybe those who want to go with the U-verse, the cheap guy, but they need another month or two to make the budget comfortable. You’re 20, 30% more expensive. They could go with the other guy and maybe they’d finance in with Hearth. To my knowledge, there’s not a prepayment penalty, and so this means that now they can go with you because they’ve got 60 days to pay for it instead of immediately due upon receipt. There’s some people who will take those options.
The first thing you have to do is be honest about your sales process and the client’s needs. I’m always going to be honest with you about anything that I recommend. I’m going to give you the good side, the likely side, the bad side, everything in between. Your clients, just to be clear here, are still most concerned about how you hire and screen your painters for safety. They are still concerned about the processes you follow to ensure a quality project and experience.
They are still worried about, “Have you done this type of work? Have you served this type of client? How many people are happy? Can you show me some proof, some evidence that backs up your claims of professionalism? I have been lied to so frequently by home service people and your industry has such a terrible reputation. Will you please show me a lot of proof so I can feel confident in making my decision?” What type of warranties and guarantees do you offer? Can you talk about licensing? Insurance? These are things that we know based upon studies people really care about.
Then, you have to ask yourself, “Where are you regarding implementation of the PowerPaint Presentation Process?” I was on the phone with a member the other day and I asked them, “You know, how much of the PowerPaint Presentation Process have you implemented?” “Well, most of it.” “Most of it? Really?” We start walking through pre-positioning just the emails being sent. We started walking through the estimate. It was still being emailed. We started walking through the company story, leave-behind book, post-position packed. Well, the buyer’s guide/post-positioning packet was being used, but the other two presentation tools weren’t being used at all. Don’t kid yourself into thinking that you’re almost compliant or that you’ve almost implemented it if you really haven’t.
The thing about financing, it goes into that similar category of upselling. If you haven’t pre-positioned well and if you have not conducted the overview well and the diagnostic survey well and if you have not used the leave-behind book and the company story and all of that stuff, you’re just emailing in an estimate. You got to crawl, walk, and run and if you don’t satisfy all of those primary needs about safety and all those primary worries and fears about quality of work and reputation and a few other things, you’ll never get to even grab their attention for financing or upselling. Why? You haven’t cleared the hurdles. You got to clear all of the hurdles, so make sure that you put this in perspective. This is kind of like an advanced pitch to a degree. Make sure your sales process is strong.
Offering financing will not make up for a weak, unpersuasive sales process that largely consists of impersonally delivering a scope of work and price. Financing ain’t going to make up for that. If you’re losing a lot of jobs now and your close rate’s really pretty low, you need to examine your sales process first. Don’t think that just offering finance is going to be a panacea for all of that.
How and when do you work financing into your PowerPaint Presentation Process? We know that it’s important. There’s a time we’re going to lean on it pretty heavy, and there’s a time that we’re going to mention it because as you interact with the clients, you can’t say everything. You can’t tell them everything. They don’t have the bandwidth to listen to everything, so we’re going to present it when it’s appropriate.
I’ve taken existing sales tools and I’ve added messaging about financing and it’s highlighted in blue, so whenever you see a template, when they get published for the mastery calendar item, you’ll notice that the blue part is about financing and I’ve created a few standalone tools to help you integrate financing into your sales process.
A note about timing. While financing for painting contractors is something that we mention, it’s not something we initially lead with as a primary differentiator. Why? We know based on survey data what they really care about first and they address the big stuff first. Financing is most helpful when we discuss it in detail as price is presented. That’s really where you lean on financing, not that we’re not going to mention or talk about it or give them information in advance or during part of our sales process. We are, but reducing the price pain and making the investment more manageable is the number one benefit of offering a financing option.
During pre-positioning, when are you going to talk about financing? I’ve really got two things. Number one, we send a manual email and it’s a template. If you look at the bottom left-hand of the screen, I’ve highlighted in blue and underlined additional section that we need to add about financing. I think it’s the perfect place. I looked through other places and really couldn’t see where it would fit in with our current sequence, but I think it fits in here. Additionally, I created a generic template about financing that you can put into your pre-positioning packet and the attachments that you put on the first manual email.
One thing about mail, I think for most of you the four pieces of paper that you put in your pre-positioning mailer gets you to an ounce, so putting one more extra piece in there probably means you’ve got to add another stamp. If that’s the case, just go ahead and stuff the envelope up that next ounce, meaning if you’ve got just one sheet for testimonials, well, print it front and back and maybe add a second sheet because the paper costs a penny. The postage is where the money is, so go ahead and stuff your envelopes. You can both use this as an attachment and you can also include it in the email. We’ll be sending it by mail and email as an attachment plus the verbiage that’s inside it.
Now, I included Parth’s flyer, which is better designed than mine, because I think most of you will end up selecting them as a vendor for the same reason that I think they’re a good fit and I’ll talk about that in a moment, or actually, Alex will talk about it in detail. I put in something generic in case you end up doing something different.
Pre-positioning and presenting, when you present, this is where that I think that it needs to be added. Number one, on the residential interior and residential exterior survey, I added a final question, number 17. I think it’s a different number on the other one. It says, “We offer financing to help break your project down into small monthly payments. Would you like to learn more about this when the time is right? Yes or no?” Since our guys fill this out 50% of the time and since we collect the data ourselves a hundred percent of the time, then we should be able to get an answer to this question.
Of course, when we send this out to them and then when they have it, when we see them in person, then that means we can go ahead and talk about financing and know that it’s important when we get to that stage and present it. We’ve got a heads-up from the first seven to 10 minutes that we’re with them that they’re going to be interested in financing. Some people say, “No, not interested.” That still doesn’t mean that you don’t present it. I think you present it every time without exception because people tell you things and then they decide something different later on. You see that happen constantly. Same thing with financing.
How did we alter the tools? When it comes to presenting, continued, I’ve developed a slide, which is almost identical to the flyer in formatting for the sake of consistency and repetition. You need to put that in our large leave-behind book, that three-ring binder with all of the social proof, befores and afters, testimonials, and the more the merrier. Probably put it toward the front of the book.
Then, I also added a line to the buyer’s guide document checklist where you can insert that flyer that was previously mailed to them. You just put it in there a second time. It’s got that check mark there. Where you want to add this slide is both in your company story, I think it’s worth adding in the company story even though we only have a handful of slides there, and in your leave-behind book. Add that financing question to the check mark, and then to your documentation list, insert that flyer.
It’s essential to present payment options every time you present price. If you’re going to offer it, offer it every time. Alex is going to kind of show you a tool that they have that gives a range. Now, these are estimates. When they go to get financing through the portal with Hearth. Depending on what comes back, their numbers are going to be different. They could have better than good credit, they could have worse than good credit, and so we don’t know what they’re going to have. They have excellent, good, and a couple of other options.
When you present your proposal, I would say something like this and I put this script in there for you to make it simple. You don’t have to use it word for word, but I would. “As you can see, the cash price is $11, 763.54. Now, Mrs. Johnson, the price is so precise because we use specific production rates and we give firm quotes instead of loose estimates, so we’re never going to come back to you say, ‘Oh, it’s going to cost more.’ You also have the option of financing your project. As an example, someone with good credit, I assume you’ve got excellent credit, so your prices would actually be lower and better than this.
“You’d have an estimated monthly payment that looks something like this. Seven years, probably between 188 and 203, at five years, 298 to 310. At three years, 413 to 440. It’s kind of a range. Now, don’t hold me to this. You get in there, I think you’ll probably get a better deal, but these are just projections. Do you think you’d be looking more toward financing or more toward the cash price?”
When you ask that, it’s easier for people to choose between two options and say yes than it is choose yes between yes and no. Now, you’ve got them thinking about, “Well, which option would I choose?” Not, “Am I going to do this?” Of course, you know how we close out estimates by asking their opinion about what we presented, addressing objections, making sure we absolutely hear what they’re telling us, repeating it back, solving that before we move on to something else.
Then, simply asking them, “Given what I’ve discussed about our painters and how they’re hired and screened, would you like to go ahead and be put on the production schedule?” We’re always going to ask for the business, but giving them those options between financing and full pay is going to make it easier for them to say yes later.
Another good thing about financing and that you should really use this as a tool is the high-price objection. Almost all of you are going to get that because, as we know, if you can’t be the cheapest you might as well be the most expensive. You can never be the cheapest. Most of you have pretty darn high charge rates compared to your competitors. First, make sure you’re addressing what makes your painters, processes, and product knowledge better and superior and you talk to them about why it’s worth more money.
That’s the fundamental underlying argument. It’s not, “Can you finance it?” It’s, “Are you worth the extra money?” If you’ve done a good job in your sales process, if you’ve been persuasive, if their experience has been different, if you are gifting, if you are pre-positioning, if you are walking them through all of the presentation tools, their experience with you is going to be night and day compared to the other painters. The information that you give them is going to be night and day better.
Now, if you half-ass your sales process, you’re going to struggle to close on the spot and you’re really going to struggle when the price point gets high. Now, you’ve got to make sure you’ve addressed the things first, but once you know that you have and you feel that you have, then simply ask, “You know, in addition to what I just shared with you, would you rather go with a professional company like ours if we could break your project into small monthly payments? Would that make it easier for you?” “Well, I don’t know.” “Well, it would not hurt to apply, would it? You could just see what it would be. Do you want me to send you the link?” Or however you do it, exactly, and Alex walked me through it but you’re going to have to learn the technicalities on this.
To summarize, the desire for financing home improvement projects is on the rise. I don’t see this going down and people are not going into less debt, they’re going into more debt. Financing is more common, not less common. I believe it’s going to be more common and more common. Financing helps you close more painting projects for, A, people who live a financed lifestyle where everything is a payment, and also those who need large projects broken into smaller payments. It’s going to help you.
Finally, you are at a serious disadvantage if you do not offer financing, yet your competitors do. Maybe the disadvantage is not severe right now, but it’s going to grow more and more severe. I had one of our members, I think it was Kevin Eason or Kevin O’Brien one. I’m pretty sure it’s Eason. He asked me. He said, “Who would you recommend for financing?” I sent him over to Alice because he said, “I just lost a job because I didn’t offer financing.” It’s going to happen and the thing about losing jobs because you don’t offer financing is professional franchises like CertaPro, Fresh Coat, Five Star, they’re going to be presenting financing.
You never know who you’re up against and you know as well as I do that often your customers aren’t going to tell you anything about why they didn’t choose you. They just won’t tell you. You’re not going to get much feedback from them, and if they do give you feedback it will not in many cases be accurate feedback. If you occasionally hear about it, chances are it happens a lot more than you think. Every time we can have a tool in our belt that the average painter doesn’t have, and the average painter does not have financing in their tool belt, then we’re really going to be ahead of the game. It’s just something you need to do.
I want to talk to you now about a partnership with Hearth and I’m going to have Alex and Noah come on here. One of the questions you probably immediately ask is, “Well, why them? There’s other options.” There’s not a ton of mainstream options, but there are a lot. The biggest thing that I like about them is they charge a one-time flat fee to access their mobile app, their tools, and their network lenders. Other customers take like 7% and hire and that’s 23% of your 30% cash flow-to-owner goal. If you have to work 7% into a project somehow, that’s expensive for you. I added to their presentation a slide that I thought it was important for y’all to see so that you could understand the long-term ramifications of missing percentages of your job. That should be between the client and the financier that should not be on the shoulders of the contractor, in my opinion.
Finally, they were responsive and easy to deal with. I talked to Noah, I talked to Alex. They were just easy to deal with, and Alex is the person you’ll work with directly. It was not easy to deal with other companies, and my thought was, “Man, if trying to deal with these companies is this painful when I’m trying to put them in front of members and painters, how painful would it be for our painters to interact with them?” My experience has been good with Hearth, so that’s another reason. It’s a big reason. Customer service and communications is very important.
I am now going to switch slide decks and I am going to introduce you to Noah and Alex here. They’ve made me their presenting diva because of technical issues and I’ll be running the slide show, so as you hear them say, “Next slide,” I’ll just be in the background here clicking my heart out. With all of that having been said, Alex, Noah, jump in here, buds.
Hey. Hey, everyone. I’m Alex. I’ll be walking you through the bulk of the presentation here, and anybody who wants to look at potentially coming onboard with us, I’ll guide you through everything. I also want to just quickly introduce Noah. He is a major part of our Marketing Department and put together the bulk of the presentation, so I want to let him jump in and introduce himself, so I’ll…
Yeah. Thanks, Alex. Quick intro. Noah Adelstein on the Marketing Team here at Hearth and we’ve been talking and working with Brandon for… I don’t know, Brandon. It’s been a couple of months now in the works with everything and really would just say excited to be presenting with you all right now and are a fan of Brandon’s process. I think the presentation up until this point has been great. One of the things that Alex will kind of get into how our product works and the value that it can add, but a big part is actually adding the financing into your sales process.
We’ve created a technology platform that we would say is really revolutionizing the industry and Alex will get into it, but a big part of that is actually adding it into your process and being able to use that to see more success. I think Brandon cued it up and has a really solid approach for how to really be winning deals with financing and not just offering it. Excited to be here and appreciative of Brandon, and we’ll let Alex kind of take it from here.
That’s some good butt kissing, Noah. Alex, you pick it up from here.
All right, sounds good, my friends. Quickly jumping in, Brandon, would you mind going to slide three real quick?
Just say, “Next slide,” and I will click it.
There you go, “Why should I offer financing?”
There we go, okay. Most Americans are not prepared for the next big spending purchase, and so it’s really the bulk of how people are living the American existence. That’s why really financing is so relevant, so you want to be able to help these people out. Next slide, please.
Once you’ve made the decision that financing is something that you want to provide to your customers, you really got to look at, “Okay, what are my options?” Traditionally, you would partner with some kind of lending partner. There’s some big names that everybody’s heard of like Wells Fargo. You may have heard of like Syncrony. There’s a bunch of them out there.
These are banks and with them you’re going to be able to do what’s known as buydown financing. This effectively allows you to be a loan broker, so basically you can walk into someone’s house, tell them exactly what rate they can expect to pay, and you could maybe say, “This will be some kind of low-interest loan.” On the back end of that, you’re going to have to pay that lender a big chunk of your profit, typically like seven to 10 percent every time you offer a loan.
With us, we have a profit protection model, so you pay a flat fee for the year. It’s a fixed cost. It’s going to range from somewhere between 800 bucks to 1500 bucks for the year and I’ll get into the specifics. Also, everybody here has preferred pricing, which is great, so thank Brandon for that and we’ll get into those details, but you really need to decide for yourself. If you want to put financing in front of everybody, if you want to get hit with a fee every time, or do you want to know what the fixed cost that you’re paying to get this in front of everybody. Next slide, please, Brandon.
Sorry. I was messing around looking at questions. Go ahead.
All right, no worries. This is really simple math, here. If you’re paying seven to 10 percent on a $5,000 job, you could be paying 500 bucks, $10,000 job, you could be paying a thousand and it just keeps going up. You also want to look at it not just from one job, and I think on the next slide here you can see that as you start doing multiple jobs how this can really add up. If you put this in front of everybody, you start closing a lot of deals, you could really start getting hit with a lot of fees and that can be painful, so I want to help you protect that bottom line. Next slide, please.
I’m just jumping in here, guys.
Go for it.
The main thing is this, and this is one of the big reasons that I liked Hearth. I know if you don’t read this it’s… If your [inaudible 00:28:06] 50 projects a year, which for a lot of you that write 500 to a thousand estimates a year, you probably will. I mean, that’s a small number. That’s like 5% of all of the estimates you see. It’s probably for a 50% close rate, that’s only one out of 10, so it’s a very reasonable number.
Let’s say that the price of the job’s $10,000 because it’s a bigger job, and I just picked that as a price. It could be smaller, it could be bigger, whatever, but even at 7%, that’s 35 grand. That’s a lot of money. If it’s around 10%, it’s 50 grand for financing. Most of you don’t want the 3% credit card penalty and you add a payment thing to it, so you’re really not going to like the financing, guys, if you do it the other way, I don’t think.
This next slide here, I think, is pretty straightforward. Looking here, everybody can just see a side-by-side comparison of what buydown financing looks like next to a profit protection model, and so really what you’re seeing is that Hearth is changing the game here. We flipped the whole traditional model on its head. With buydown financing, you’re going to pay a fee, typically like 7% or higher. Also, you’re going to find that a lot of people aren’t going to get approved. If you have less than perfect credit, a lot of times just less than a 700 FICO, you’re just going to get straight up denied, your customers, that is.
Additionally, these banks will be open to new businesses, so you’re going to have to be in business typically like two to three years. It’s pretty detailed. They’re going to underwrite your business and make you do a ton of paperwork to get set up with them, and a lot of the time they actually require you to do your merchant services with them as well. I think Brandon was just talking about getting hit with that fee. We don’t require any of that.
Also, the jobs will typically cap out past 50K. That might not affect everyone here. Also, they do a hard pull on your credit. Just as an example, if someone goes to their local bank and they get denied by their local bank and they try to get a loan with you guys, they have a less likelihood of getting approved the next time when they do a hard credit pull because it’s hitting their FICO by like 20 points every time. We don’t do any of that.
If you look on the left side, the profit protection financing, there’s no dealer fees or per loan fees. You’re not going to pay a fee on every loan, none. We work with FICO scores as low as 500, so you’re going to see many more people getting approved because we actually partner up with about 15 lenders, not just one lender. We’re open to all business. This could be literally your first day like opening your business. We don’t have to underwrite your business and the reason is because the relationship is between your customer and the lender. It’s not passing through your business in any way, shape, or form, so there’s no risk to you.
The loans go up to a hundred grand and also we’re doing a soft credit pull. There’s no risk to your customers to see what options they get. As Brandon talked about, being a good guy and being honest, there’s no harm in seeing what they can cough up for. Next slide, please, Brandon.
The way that people get approved, so we’re going to look at everything holistically. It’s based on the personal credit of your client, so we’re going to look at FICO. We’re also going to look at income, debt-to-income ratio, overall financial history. I’m not requested. We take a look at the whole picture. If they have excellent credit, which is going to be 700 to 850 FICO, they’re going to pre-qualify 90% of the time, seeing rates from 4.99% going up to 16%. Loans go from a thousand to a hundred thousand. The terms of loans, they actually go out to 12 years just like a little minor update, and they’ll get options from 13 of our lending partners.
If they have good credit, which is going to be 640 to 700 FICO, they’ll pre-qualify 70% of the time. They’re going to see rates from 13 to 26%, loans from a thousand to hundred thousand, terms from one to seven years. They’re going to get options from 11 of our lending partners. If they’re building credit, which is going to be below 640 FICO going all the way down to 500 FICO, they’re going to pre-qualify 39% of the time, seeing rates from 19 to 30%, loans from a thousand to 50,000, terms from one to five years, and they’re going to be getting options from five of our lending partner.
Just really quick, just want to jump in here and just men
tion there’s no penalty to pay off early, so you run into all kinds of situations. Someone just bought a home and they’re tapped out on all of the money they spent to get into this place, but they want to do some fixes and they want to get something done. Maybe they have a good paying job, up and coming family. They can get stuff done with you guys and pay it off in a couple of months and be free and clear of it. Also, people go through bankruptcy and divorce, so if someone doesn’t have perfect credit, we’re still providing them with options and it’s a good way to get projects done. Next slide, please.
Just ask a question that they may have, and we’re going to take questions at the end here, I haven’t had a loan in like 12, 13 years, so I don’t even know what a rate is anymore. The APR range, I mean, number one, I think that our clients, people that want to have their house painted tend to be upper end clients because people will not roof their house, they will not plumb their house, they will not do electrical, but they will paint their own house. Most people do paint their own house up to a certain age and a certain income. My question to you would be, if somebody’s got good or decent credit, what kind of rates are you generally seeing? The spread from 4.99 to 16’s pretty big.
Yeah. Yeah, yeah, yeah. Just as kind of a general thing, if you were to walk into your local bank and try to get a loan, typically you’re going to see like 12, 13% is what they’re going to offer you. For a personal loan, remember, there’s no collateral. This is not a home equity line of credit. For a personal loan to get a 4.99 rate is a great rate. The reason there’s a range on there is there’s just all kinds of things that affect the rate.
Someone might have excellent credit, but like you said, you work with well-to-do people, they might have just bought three BMWs in the driveway, so we got to look at what’s going out. Have these people just applied for 10 different credit cards like this past month? There’s a lot of things that affect that rate, but just generally speaking, if they have all of their stuff together and live let’s say a humble lifestyle even though they’re well-to-do, they’re going to see a great rate and they can get a rate as low as 5%. I hope that answers your question, Brandon.
Very good, bud. Next slide.
Well, and actually, Alex, if we go back real quick, I just want to jump in on-
With me, and Brandon, you kind of asked this earlier and opened the question of how many people actually want financing and are asking for it, an interesting thing that we see is, A, a lot of people don’t really realize that financing is something they can get on a project like this. The answer of what percentage of people want a financing, as many things is it depends on the type of people that you’re serving, the project sizes, the area and how wealthy they are. If you think about it through the lens, especially now in this economic downturn where people are wanting to hold onto their cash, having that option for payment options when people don’t realize that they even could do it in installments is really valuable.
There’s no prepayment penalties and maybe I have the five grand, but I realize that I want to hold onto it for one reason or another and I’ll pay it off in a couple of months. Or, it goes into what Brandon was saying about the upselling and you’re in the house and it’s like, “Hey, what do you think about doing the upstairs rooms as well? We can help you get those financed.” I think just when looking at the rates and when thinking about this, it’s like a lot of people are probably more open to financing than they realize, especially when you make them realize there’s no impact on their credit, it’s not tied to anything, and it can’t hurt for them to see what they pre-qualify for.
Very good. Now, the other thing that’s interesting is most painters are not going to present financing. They barely get a bid out the door that’s just legible and makes sense. I know that our guys, our members are selling it up much higher level, are a lot more sophisticated, but I can’t remember the last time someone presented me with an estimate for a project that included financing. I’ve never had it presented to me as an option, so obviously if it’s never presented, people can’t pick it, but if it is presented, it’s just a numbers game and a certain amount of people will select it.
All right. I’m going to move on to Why Hearth?, and then to this one.
Yeah, let’s stick here. That’s pretty good. Pretty cool moving graphic that we’ve got there. Okay, so before I jump into all about Hearth, a couple of quick things, that we went over how we’re different than the competition. I’m going to ask you guys a couple of rhetorical questions. Obviously, no one can answer me, so it’s fine. You can just answer them on your own side. Some of you know over the last year how many deals you’ve missed out on because of financing. Maybe some of you can say, “You know what? There were four deals where someone asked me for financing. I couldn’t provide it and I lost that and those jobs were 10 grand, so that would have been 40 grand in revenue and I’m pulling at 20% margin on that. I could have been missing out on like eight grand or so in profit.”
You might be asking yourself, “Well, what can I do to make sure that I grab that eight grand moving forward for this year?” That’s why having financing as a tool is such a great tool. Another thing is that, look, when we go into these big box stores, I’m sure you and your customers, they’re going in on the weekend. You’re going into Lowe’s and Home Depot. They pass by the kitchen department and stuff like that. You can get a lot of work done with those big box stores and they have financing available, so you don’t have to train the consumer on the ones who use financing. You just got to have the same tools that the big box guys do.
Working with Hearth, we’re going to give you guys a branded loan request page for your specific business, so your company name, your company logo. It’s going to be accessible to your team in a few different ways. You can download it from the Apple or Google Store and have it on your phone or maybe even a tablet like an iPad when you present it to the customer. Looks very professional. You can also integrate this into a website, your website, that is, and people could sign up for financing right through your website. Then, finally, we’ll actually build you a landing page that functions just like a website where you can send the customer a link and they can fill out for financing that way. Next slide, please, Brandon.
On this next slide, you can see that it’s a pretty simple process. Basically, they just answer 12 questions. They’re the same questions that you’re going to answer for any personal loan, loan amount, you have a co-borrower credit score, income, name, phone, address. Literally takes a minute or two when you’re meeting with your client, or you can even be over the phone with them while you’re doing this. They’re going to get options from the lenders that we’re partnered with literally immediately and those options can actually be funded as soon as 24 hours.
They’re going to see everything they need to make a decision. Our software puts the best three options at the top. You guys don’t have to be crunching numbers in your head, figuring out what rates and so forth. You’re not closing the loan deal. The customer is picking the option for themselves and they’re going to see who the lender is, the monthly payment, the term of the loan, the amount of the loan, the interest rate, any fees associated. They choose the option they like and then they go to the lender’s page where they just have to submit proof of income, which is like a W-2 or a pay stub. They can get approved fully in 15 minutes, get the money as fast as 24 hours. On average it’s like three to four days. That’s where he gets the money. They pay you. Everybody’s happy. Next slide, please, Brandon.
This is kind of just reiterating some of those same things that we went through is that, “Look, this is profit protection. It’s a fixed cost. You know what you’re spending and that’s it and you can put this in front of everybody. The rates are great and it’s a really simple process to get options from a bunch of lenders quickly, close deals quickly, get the people funded, move forward. Everybody’s happy, win-win. Next slide, please, Brandon.
Let’s talk about actually tracking throughout the process here. We’re a software company. That’s the biggest thing that I want everybody to take away from this. We’re not a bank. We’re a tech company, so we give you great tools to give you guys control over the sales process. We have customer tracking. As an example, someone could be on your website. You could be on the phone with them and they’re on your website and they click a financing tab which has your Hearth portal and they enter their info.
You’re going to get notified in real time via text or email, whichever is best for you, and you’re going to see who’s going on your portal, so you’re going to know that these people are serious about getting set up for financing and it’s transparent. You’re going to see exactly what they get approved for. Exactly what they are seeing, you are going to see.
Someone might be thinking about doing a project where they’re just repainting the kids’ room or something like that, the kids’ play room. Maybe it’s a simple project for a few grand, but they could ask what they can apply for for financing. Maybe they say, “You know, let’s see if we can get it approved for 7500,” because they’re thinking maybe doing a bigger project. They might get approved for 12 or 15K. You’re going to see that, and then you can position your product around that, what you guys can deliver.
Like Brandon was saying, you guys have a product that costs more and it’s more valuable and there’s a reason behind it, so you can position your product around that and you’re going to know what people are working with. Then, finally, you’re going to see when the money hits a customer’s bank account and then you’re just going to collect the money just like you would from anybody who had the cash to begin with. Brandon, next slide, please.
This is just kind of giving you more insight into this and we’re going to give you a dashboard. You can track everything. For some of you guys who have bigger teams, maybe you’re the owner and not the one doing actually all the sales. Brandon, if you could do the next slide, please? You’re going to be able to see what all of your guys are doing. You can track your own leads and then you can see what your sales guys are doing as well. You’re going to see who’s really out there kicking butt, getting deals funded, closing deals, all of the above, so a really great way to just track everything across the board and know that you’re winning with Hearth. Next slide, please, Brandon.
Presenting financing, we want to make this very simple. Again, this is not rocket science. Literally, like we were talking about, Brandon as well as I, there are some people… it’s not necessarily the baby boomers. If you’ve been saving your whole life, you might not want to explore financing if you’re like 65 or 70, but people that are in their 20s, 30s, 40s, 50s, they sometimes live month to month and they think in terms of monthly payments, so that’s all we got to present to these people. With our loan calculator, you just punch in the cost of the job, and this example we’re looking at, $12,000 job, and these homeowners have excellent credit in this example.
You’re seeing that the average payment to Hearth is funded over three, five, and seven years. Over seven years, it’s 198 bucks a month. It’s a much easier pill to swallow. As you’re presenting this to your clients, you’re just going to say, “Hey, look, this is what it’s going to cost to do the interior paint of your kitchen and bathroom and you can pay cash, check, credit. If you want to pay monthly, it’d be about 200 bucks a month.” They’re going to tell you when they’re interested. All you got to do is present it, so it’s getting them interested and bought in on doing financing. Additionally, this can be integrated into your website, too, and then people can use this tool and get kind of locked in on getting set up with financing themselves. Next slide, please, Brandon.
As far as the success tools for you guys, Brandon already showed you this. Okay, so I think it’s a great tool. I actually looked at some of the Painters Academy stuff about the way Brandon teaches you to sell, which is great like doing stuff proactively, so you guys are setting out a packet of what you guys can deliver. One of these things could be financing as well that you partner with Hearth. This could be digital. We do these digital flyers for you, so it’s going to have your branding.
Like in this example you’re seeing, the big end contractor by his name, that would be your branded logo and business name. You can email these out to people. You can easily post this right to social media. Put it up on Facebook and all of that stuff, and it’s digital, so the most important thing, it has your contact info, but the most important thing is it has a unique link to your specific Hearth loan request page.
If you were to run, let’s say, like an ad on Facebook or Instagram, it doesn’t cost a ton of money to do it and you should. I don’t work for those guys but the stuff works. When they go to your portal and start entering the info, we’re doing the lead capture for you, so you’re going to have those people’s name, phone, and address so you can followup with them. This is a way to generate leads as well. Next slide, please, Brandon.
We got you covered with all of the web and tech stuff. That’s really the big takeaway from that last slide and this slide here. You’re seeing here the website banners that we have available for you. This is exactly how it’s going to look. I’m not going to put it into your website for you, but I will give you the HTML code and you can have your web guys put this into your website.
These are fillable fields, like on the left-hand side, “Fund Your Project,” so they enter the info, hit “Get My Rates.” They’re going right to your portal, jumping right into it. You’re seeing some other things about 0% financing, which is also something that we offer, which is a great tool for you guys, especially for people like we’re talking about who are well-to-do. As we jump into the next slide, Brandon, I’d like to go over the 0% financing that we have available.
We have a 0% credit card, so I don’t know about how you guys feel about this statement personally. I don’t know if you like the term “OPM”, other people’s money. I’d much rather spend somebody else’s money than my own. This is how rich people think and that’s why 0% can be such a great tool. For your customers who have great credit, 680 FICO or higher, we have the ability to offer them a marketplace of 0% credit cards. It’s all automatic within the app and they’ll get cards from like Visa, MasterCard, Bank of America.
These are cards that every consumer knows. They’re going to apply for it like any other card. It might get approved immediately, and you’ll get notified. It’s a physical card that they’re going to get in the mail and they’ll pay you with it. They should be able to get a $10,000 credit limit and 15 months 0% APR, so it’s going to cover a lot of the projects that you guys do. It’s not so much of just a tool to close the deal.
It’s an outstanding marketing tool when you can advertise that you have 0% financing for qualified buyers up to 15 months. Like, “Do you think that I don’t have the 0% credit card from Home Depot in my wallet? I do.” Okay, so people want to have those same options. It’s a great tool. Now, it is a regular credit card, so when you process the card there is going to be the merchant fee that you always pay, but a great tool to get people in the door. Moving forward here, next slide, please, Brandon.
These are just kind of additional features as we kind of show you that we want to make sure that you guys are successful. Our account managers are actively monitoring your progress to make sure that you’re doing well with Hearth and we’re going to continually give you personalized tips to make sure that you guys are successful as a part of our launch program. Next slide, Brandon, please.
With our dashboard, you’re going to be able to track everything and really see and know for a fact that you are getting return on your investment working with Hearth. Final thing is to get into pricing. Brandon, if you want to jump into that? Slide 25. We have three plans to choose from. I’d like to just present the standard pricing so you guys understand how great of a deal you’re getting as being a preferred partner with Painters Academy. Normally, all of our plans have a one-time onboarding and training fee of $99 and all of the plans are the same with respect to they’re all paid in full to get started for the year. They’re good for 12 months. You won’t see another fee for the next 12 months, so if you guys wanted to get started today, you wouldn’t see another fee until July 9th, 2021.
Our first plan is the Essentials plan, so typically that one is going to be 799. That has a lot of what we covered. It’s missing some key things which are going to be the ability to track your customer, so you won’t have the functionality of that like lead capture. You won’t know who’s going in your portal or what people are getting approved for. It also does not have the loan calculator, which is really a tool that you need to have. Typically, that one’s 799, but with you guys, you’re actually not paying the setup fee of $99. That’s why you’re not seeing it on the page anywhere, and also we’re discounting the annual plan by a hundred bucks, 699 for the year.
Now, where I would typically like to see everybody is on the Pro plan, which is our most popular plan. 95% of the time this is going to be a great fit for everyone. This literally has everything that we covered today, with the exception of that 0% credit card add-on, which I’ll go over in a second here. It has everything in the Essentials, it has all of the customer tracking and notification, it has the loan calculator. There’s five sales rep accounts. That’s for your team so that you guys are the owners and then you’ll be able to view down on your reps as they’re out in the field. It has same-day support from us, Monday to Friday, if you need any help. That one is going to be 899 for the year.
It’s not shown on this slide, but we do have the 0% credit card option add-on for an additional $199 for the year. You can add that on to the Pro. You can also add it on to the Elite plan. The Elite plan is for people like… it’s a great tool if you guys don’t feel that like you’re super tech savvy, for sure. Okay, so with this one you get your own dedicated account manager.
As an example, you could be in front of your customer and they might have a question. You’re like right there about to close the deal and they have a question about the loan that you don’t know how to answer. Then, you could just hop on the horn real quick, give us a call and we’d say, “Hey, let me call my rep Amanda down at Hearth Financing real quick.” You’d call and we answer the question and take care of you, so your own dedicated account manager. It’s just an extra level of support. Also, if you have like multiple businesses, we kind of give you a package deal. We can do a couple of portals for you. That one is going to be 1399 for the year.
That is everything. Really, now it’s time to for the most part start wrapping things up and go through your questions here. A couple of more slides as you’re looking at… You can really can just get a return by doing one job with Hearth. This is the average revenue closed with one deal with Hearth, $10,000, two, and so on and so forth. If you can close three deals, you can really see a big impact on your bottom line.
The next slide has some testimonials. We got outstanding reviews online recommended by like CNBC and Martha Stewart and you can look up up on the BBB. We got like 70 reviews on there that are almost all five stars. You just a great up-and-coming company. I’m very proud to be a part of this team. That’s pretty much it. Brandon, if you want to jump in on this next slide and tell everybody about how to get moving forward with the process here?
Guys, it’s simple. If you want to start offering financing if you haven’t, or if you have been offering it and you’re unhappy with 7% or whatever percentage that you’re paying down, you can go to paintersacademy.com/finance, paintersacademy.com/finance. It will take you to this exact page and you can either schedule a demo or get more information either way. Alex will get in touch with you there and if for some reason you need this link emailed to you, if you’ll just email me, I’ll send it to you right away if you don’t want to have to copy this down if you’re riding around in your truck, et cetera. Just email me and say, “Hey, send me that link, Brandon,” and I’ll do it.
Now, we may run a little bit over. We typically cut this thing right off at the top of the hour, but I’m going to hang on to answer questions and I’m going to go to the questions now. If you have any of those, just click the old raise your hand button. We’ve got one from Christopher here. I don’t know what it’s about, but you had the little hand raised button pressed down, so I’m going to come to you first, bud. It’s [inaudible 00:54:07] self-muted. Oh, there you go, Brad.
Hey, man. Good to see you.
Yeah, good to see you as well. Just a quick question in regards to financing versus credit card payment. What would a homeowner see for cost savings if they were to finance versus use a credit card?
I can take that one. Thank you for the question. A credit card, so think about the kind of buyers that we have in the world. We’ve got the cash buyer. They’ve been saving all of their life. They pay cash. They’ve got the credit card buyer where they know that within 30 days they can pay something off. Then, you’ve got the monthly payment buyer. With the credit card, if you know for a fact that you’re that close to having what you need and you can pay it off in 30 days, then credit card is the way to go, but if you’re going to roll over the 30 days, well, you’re going to get hit with a big fee from the credit card. Those can be 20-plus percent APR getting hit with fees.
The savings to the homeowner if they know that they’re not going to be able to pay it off in 30 days, maybe it takes them six months or a year, three, whatever the case may be, they can lock in a rate closer to like five, six, seven percent rather than paying 20% on that same amount of money. It can be a huge amount of savings depending on what the amount they’re financing is. Does that answer your question?
Yeah, definitely. What do you see for an average interest rate being approved at?
Average interest rate, I can’t give you an answer on that because I just want you to understand that we deal with a garden variety of homeowners. We have everybody from a tree just crashed on someone’s roof and they got to get fixed and they’re in a low-income area to someone wants to do a hundred-thousand-dollar kitchen remodel with 800 FICO that makes 300,000 a year. With that being said is that if people have excellent credit above 700 FICO, they can get a great rate and they are seeing those rates very close to 5%. If someone has not good credit, I will say this.
Typically, the lows sent under FICO, most lenders are just denying these people, so these are going to be kind of like working class type of customers and they’re going to see a higher rate than would the people who make a lot of money and have been paying off their stuff for a long time. I know that didn’t exactly answer your question, but I hope that it did kind of a better job of getting to what the rates would be for your clients, which I’m thinking are going to be better because these are kind of more well-to-do people.
Excellent. Thanks, guys. Appreciate it.
Brad, good question, bud. Let’s see. Other people that have questions… Let me go to Tonya. Tonya, you’re self-muted. All right, try it again. Tonya, you’re still self-muted. Maybe if you just type your question in? Let’s see if I can get to the questions here. We did have some questions typed in. Let me look through here. All right, I’m going to go back to the attendee and see if I can get to you. All right, I’m going to come to Robert now. Robert, go ahead, buddy.
Hi, guys. Basically, my question is regarding to once the customer gets approved for the loan and they get the money, what prevents them from going with another painting company rather than going with us?
All right, great question. I’m glad someone asked that because that’s an important one and I usually get that on almost every single presentation. Okay, so a couple of things. First off, regardless of who’s doing the financing, every time you do a financing job you want to get a cash deposit, and that’s going to be separate from the financing itself. That’s going to secure the bid, so you want to have your contract tight. We are also going to have them sign a letter of intent that they’re going to use a hundred percent of the money with your business. They cannot pull the loan without doing that.
You can even print it out and have it in your materials when you present the contract and have them sign off. Excuse me, I clicked the view. You’re not going to sue someone over that legal agreements, but it is really putting all of the pieces of the puzzle together to make sure that you lock in the bid. If you guys take, whatever, 500, a thousand bucks cash deposit, they’re not going to walk away, so when you show up a week later and do the job, they’re not going to say, “Joe Schmoe did the job.” No, because otherwise, you just keep their thousand bucks and that would not be very intelligent of that customer.
Why Financing for Painting Contractors Works
Also, we notify you when the money hits their account, so you know for a fact a hundred percent they got all 10 grand or 15 grand sitting there. It’s actually better than cash because in a cash situation, someone could say they have the money and not have the money. In this one, you know for a fact they have the money. They sign the agreement, then they leave the money with you. You get the cash deposit. That locks in the bid. You know they have the cash. You do the work, they pay you. You’re happy, we’re happy, they’re happy, everybody’s happy, win-win-win.
Does that answer your question?
It wouldn’t help much to close a deal because at that point of offering the job or the contract to them, they’re not ready to sign yet, much less give us a thousand dollars when we’re at the selling point. The attractive part of this is helping us get the job because we offer financing, but it seems like we’d have to already convinced them first, then get a thousand dollars, and then see how much they get if they qualify.
Yeah, and this is just my two cents. Who cares what they do with it? We want them to obviously use it, but if somebody gets financing for something and doesn’t use it for that or whatever, that’s the same person that could have just… You have no guarantees that people won’t back out of projects anyway. They didn’t take the loan out through your business. You’re not responsible for it, so in the end, what they do is beside the point.
For me, I think the percentage of people that end up not doing a project is probably super low, but in the end, what’s it matter? You get a contract signed, you put it on the schedule and they say, “We’re not going to do it?” Well, great. You’re six weeks, four weeks out. You just move on to the next project, so I would say it’s not even worth thinking about.
I want to add in one other thing, and forgive me, I didn’t hear your name when I was… anyways, when you asked the question, but it’s still a really good question. I was reading between the lines of what you said and I what I heard actually was that it’s not a reason to actually get the deal closed, and with that part, you’re a hundred percent right.
The fact that you have financing, it’s not the reason for someone to work with you. It’s like the last thing on the list. They want to work with you because they like you. They know you do amazing work. You stick by your word and you’re going to do something outstanding for them. That’s why they’re going to want to work with you. You got to have them convinced that they want to work with you.
Yeah, that’s a nudge to get the deal closed, it’s not the big lever. Does that make sense?
Right, yeah. That’s what Brandon said at the beginning of the presentation.
Very good questions, bud. Other questions? See if we got anybody else on here. It’s got some. I’ve got Robert. I’m going to try Tonya one more time. There you go, Tonya.
Oh, hi. Okay. I missed it. How many lenders did you say you worked with again? That was the only question I had.
Repeat that one more time. We had a feedback loop.
Okay, so we advertise 13, but we do have 15 lenders in our network. We’re always constantly like adding to our network of lenders. We added a couple within like the last six months or so, a couple of new ones.
Also, just so you know, Tonya, you don’t have to like pick. The system picks all of that. The customer picks what offers they want and once you get them in the system, the system and the client take care of all of that so you don’t have to turn into a loan broker. Then, that’s another thing I like is you give the customer the opportunity to make their decisions and the system kind of takes care of the rest. I’m going to unmute you again real quick here. Do you have any followup, Tonya?
No, I was just saying that’s great news because I worked in the mortgage industry 23 years. I didn’t really want to go back to it, so…
Very good. Awesome. Well, thank you for the question. Anybody else have any other questions? I know George, you’re on here. You signed out and signed back in. You said you didn’t have audio, but I assume you figured it out. Let’s see. Any other questions before we wrap it up? Make sure there’s none typed in here that I didn’t get to. I don’t know how to do this. Let’s see. All right. I don’t think so. I think I got them all. Let’s see. Yeah, that’s all of them as far as I can see. Last chance if you’ve got a question to click the raise your hand button. I’ll come to you. If not, I’ll let Alex and Noah kind of wrap us up here.
Yeah, I think if you guys want to book time with me, I’d love to meet with you guys and we’ll go over it. Tailor it one on one specific to your painting business. We’ll go through everything and we’ll see the best way to make sure that this is the right fit and how to get a return on your investment, so just fill out the form as Brandon had mentioned. Well, I think I’ll already be talking to two of you shortly, so thank you for doing that already. Noah, do you want to jump in with anything?
No, I think you guys covered it. Just appreciate the time and excited to begin to work with you all. We’re here as a resource, so however we can be helpful in helping you be more successful, that’s what matters to us and looking forward to kind of an ongoing relationship with Brandon and you all and let us know what we can do to help.
Awesome. Guys, great work. If you’re interested in this, just go to www.paintersacademy.com/finance. Of course, you can email me. I’ll send you the link directly if you prefer. Finally, we’re going to be posting this in the members-only portal and we’ll be sending it out to all of the Member’s Only Portal and we’ll be sending it out to all of the members a couple of different times because I think sometimes people if I don’t put an emphasis on it, they may not go to it, so we’ll try to get this out to the list.
Guys, I appreciate you very much. Hope everything’s going great in your business. Keep doing what you’re doing. If you focus on the inputs, the outputs will follow. Love you, fellows. Take care. Talk to you soon.
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