The Importance of Bringing HVAC Financing Options to the Table
By Herbert Dwyer, CEO and Co-Founder of EMPEQ (Empower Equity)
As an HVAC contractor, you sell customers on the promise that you install the highest quality HVAC and other critical energy equipment on time and deliver top rate maintenance services, right? These days, another way to help close those larger deals more often is to bring attractive financing options to the table when you provide the estimate.
Although customers typically pay for smaller deals by check or credit card, financing HVAC equipment is a good option when there is not enough money to replace more expensive critical equipment.
Traditionally, the sales process begins with a contractor going onsite to examine that machinery that needs to be repaired or replaced. After the estimate is given, the customer typically must reach out to banks, credit unions or other financial services companies to explore financing options. This process puts an extra burden on the customer, which can delay or even end the sale.
In contrast, a Heating & Cooling contractor in Albany, New York recently won a sizeable contract to install new HVAC systems in a large multi-family housing unit over a competing contractor who had offered a less expensive equipment package. Why? Because the winning contractor had brought in an outside financial services company that offered an easy-to-apply, attractive financing offer from the start.
Some business owners may postpone the decision to purchase a new HVAC system because they aren’t aware of all of the latest financing options or they are reluctant to fill out the lengthy paperwork involved in standard loan applications. However, there are some financial institutions which are offering a variety of easy-to-apply financing for critical equipment. For example, EMPEQ offers two totally different approaches to financing critical equipment for buildings:
- On balance sheet financing – involves the customer entering a traditional loan where he finances the purchase of HVAC or other critical equipment over a period of years. The customer owns the equipment and pays interest on the loan until the loan is paid off. This shows up as liability on the building owner’s balance sheet.
- Off balance sheet financing – involves the building owner entering into a services agreement, whereby he or she pays a monthly subscription fee, instead of interest on a loan. This can be in the form of an Energy Service Agreement, an Energy Performance Contract or other similar agreement. The advantage of this type of agreement is that the financing does not show up as a liability on the company’s balance sheet.
As the various states across the country begin to open and return to the new normal, HVAC contractors need to take steps now to make sure that you can close your share of new business. This goes far beyond just putting a new advertising jingle on the radio. One way to get a leg up on the competition is to become more familiar with the various financing options available and partner with one or more financial institutions who can offer streamlined online applications with attractive financing options for your customers.
For more information visit https://empeq.co/