Who Offers Customer Finance?

[Joethemechanic]

The reality of today's economic situation is that many people are not, (and can not be) prepared for emergency repairs to their homes. The need for a new service or a panel replacement can be beyond the means for many. People may have to make the hard choice between having substandard electrical repairs made, or not having repairs made at all.

Do any of you offer financing? And if so, how do you secure it? Property liens? Something like a second mortgage? Do you work with a mortgage lender to be able to offer these services? Or do you work out of your own pocket?

 

[chris kennedy]

Or do you work out of your own pocket?

We will work with resi customers on a no-interest basis and we have always been the banker for many of our commercial GC's.

 

[BAHTAH]

Customer Finance

Customer Finance

On the small jobs a customer can use a credit card or the bank, leaving you with no risk or you can carry in an effort to offer good service. On the larger jobs I recall that GE had finance programs that were available. Don't know if GE still does now as it has been a few years since I was involved. Not sure about other major manufactures.

 

[Joethemechanic]

Actually I am familiar with larger jobs, structured payments as the jobs progress and all that.

What I would like to know has more to do with homeowner finance. I have seen friends and family members do quite well selling real estate and buildings, and taking back the mortgages on them. And I would like to say, none that I knew of used the situation to gouge anyone. It was always a situation where the buyer could get a lower interest rate, and the lender ended up with a higher interest rate than they could get from the bank.

Back in the day, there were many small businessmen around this area who would finance their services. Be it oil burner service, oil deliveries, auto repair,,,,,,,,,,,

Many build very loyal customer bases doing so, and also insured a steady income when business was slow. I really think that by taking the banks out of the picture, it allowed them to do quite well.

 

[renosteinke]

I think that the days of 'informal' financing are gone.

There are two ways this issue gets addressed:

One I saw at the local Vet: you're directed to a finance company right there, to make arrangements.

The other is more devious: you know in advance that there will be an issue, and jack up your price to cover. 4 month pay? No problem; my rate just went up 40%.

Call me cynical, but good heavens! You're expected to define your work in detail, schedule to the nanosecond, and give a firm price- yet, when the job is complete, they want to fiddle with the price and payment schedule.

 

[kwired]

I financed everyone that never paid me or took a long time to pay me, unintentionally

To intentionally do so means you have to have the funds to back up what you are financing and the willingness and ability to make collections efforts if they do not fulfill their end of the agreement.

To help customers find financing through other parties may be worth looking into, this is what car dealers do, or appliance or furniture stores and other places that sell higher dollar items. Big box store equivelant is the store credit cards they offer.

 

[Joethemechanic]

To intentionally do so means you have to have the funds to back up what you are financing and the willingness and ability to make collections efforts if they do not fulfill their end of the agreement.

I can only go by what I saw in my own home growing up. Having the means was the result of frugal Germans who lived through The Great Depression.

the willingness and ability to make collections efforts if they do not fulfill their end of the agreement.

Was my grandmother's department. She was a law school drop out (because of the great depression) and she could collect money from you and make you feel like she did you a favor. (She was always flexible unless she thought you were trying to jerk her around)

I think having a really good office manager (or wife) is key to being able to make a scheme like this work.

 

[petersonra]

A lot of finance companies offer no interest financing that you can in turn offer to your customer. usually it costs you nothing. they are hoping the customer is late on a payment so the 0% interest jumps to 25% or more.

 

[readydave8]

Every situation is different, but I feel that I'm more qualified as an electrician than as a banker.

I sometimes think, if the bank won't lend them the money, and the bank is better at banking than I am, what makes me think I should lend them the money? (Looking at financing the job being the same as lending them the money to pay for the job).

But in real life, I make deals with customers at times.

 

[ptonsparky]

We do not formally offer financing, but if someone needs to make payments. We manage.

 

[jaylectricity]

I just lent my customer $300 in recessed lighting and dimmers. Then once I installed everything they paid me for my time and paid off their loan. All in one day!

 

[ASK_EDDIE]

No !

No !

I do not offer financing tho we get asked often. we do bill "some" customers.
There are all types of loans people can get, and if they cant get a loan from a bank ,credit card ect... do you really think youre smarter than the banks and can some how make them resposible consumers.
Recently we were approched by Springleaf to finance projects for our customers, they are basically loan sharks with 21% interest . The 4 people we have sent them didnt qualify , so when a loan shark doesnt think they can beat the money out of them ,I sure dont want to try.
car title loan , payday loan ? hmmm if i could get the 240% interest theyre charging
perhaps i should reconsider .

 

[renosteinke]

The more I think about this issue, the less I like playing 'banker.'

I look at my car; I look at the customers' car. Who needs a break?

I had one customer, past dealings with his family had led me to expect a happy relationship. Well, not only did he hustle me for the design work, squeeze the margins ... he also routinely wanted to 'make payments' because the banks were 'too expensive.' Ultimately, he took his business elsewhere. Probably a good thing.

Sympathy is a good thing, but you have to recognize that some folks live and breathe the sympathy game. The point has to be made: you're an electrician .... not a gardener, plumber, or bank. You're not the guy to go to for every little issue. If you let them do that, you're being played.

You're already 'financing' the job when you get it. You get to pay for your parts and time while you work the job. If the job runs over 30 days, you even get to pay the supply house before you get paid yourself. Add to that the customers' "billing cycle" and you're likely to see 60 days from project start to payment, for even the smallest jobs.

 

[CopperTone]

The reality of today's economic situation is that many people are not, (and can not be) prepared for emergency repairs to their homes. The need for a new service or a panel replacement can be beyond the means for many. People may have to make the hard choice between having substandard electrical repairs made, or not having repairs made at all.

Do any of you offer financing? And if so, how do you secure it? Property liens? Something like a second mortgage? Do you work with a mortgage lender to be able to offer these services? Or do you work out of your own pocket?

I have a saying - "if money is a problem, come back when it is not!"
Also, " for half the price, we can do half of the work "

Lastly " another person's emergency is not my emergency"

We help people out all the time - we just don't do it for free. We are a for profit organization.

 

[Joethemechanic]

We help people out all the time - we just don't do it for free. We are a for profit organization.

I didn't say do it for free, But with what the banks are charging people for CC interest, I think there is room to make a profit on financing while at the same time cutting your customers a break.