Plavecsky's Ponderings By Jim Plavecsky
by Jim Plavecsky
February 1st, 2024

Dealer Financing May Be Just the Right Catalyst for Sales Goals in the New Year

Well one thing is for certain: With pandemic-infused, “off the charts” demand behind us from recent years, the door and window business is back to business cycles marked by seasonality. So, December and January were two slower months, as usual. On top of that, we are headed into an election year. Therefore, many homeowners like to take a “wait and see” attitude when it comes to spending money, hoping leaders in the White House will eventually bring interest rates back down. These factors could make 2024 a challenging year. Perhaps your business could use a shot in the arm.

Dealer financing could be the boost that your business needs to help you achieve your sales goals in 2024. During the high demand years of 2021-22, the industry didn’t need much in the way of dealer financing. Consumer cash was in big supply due to cancelled vacations. With the mask mandates and spacing requirements in effect, the practice of dining in restaurants slowed down to a crawl, so consumers had even more cash to spend on home repairs. On top of that, interest rates were much lower than they are today. So was inflation. Today it’s a completely different picture!

So many window and door dealers are once again looking at offering creative consumer finance options to help fuel sales. But one thing that puzzles me is why many manufacturers are taking a “laissez faire” approach when it comes to setting up their dealers with an effective finance program, especially when financing can clearly have such a strong “pull through” effect on their business. If the manufacturer can work with a finance company to structure a deal whereby the manufacture can bring multiple dealers to the table, many finance companies are willing to structure programs that can offer better interest rates and lower FICO requirements, based upon the prospect of securing a higher volume of business with a certain dealer network.

It is also surprising to see that many dealers do not currently offer financing at all and so they are missing out on a substantial number of prospects who seek only companies which offer it. Face it, if you want to buy windows now and want to pay for them next year when the economy improves or when you are expecting some cash to come into your life, then who are you going to call – the dealer that takes only credit cards or the dealer that is offering interest-free 12-18 month same-as-cash, or low-interest “bridge loans” to get you your windows and doors now versus waiting until your cash situation improves.

According to John Hafeman, vice president of Time Investment, door and window customers can get loans up to $100,000 with terms of up to 240 months with competitive rates. His company offers training to dealers’ sales staff and equips them with apps on their iPads or phones, with loan approvals provided within minutes. Homeowners are sent loan docs via email and sign electronically, making the process easy and efficient.

An extra benefit to the dealer in using financing is that the dealer gets paid within 48 hours after submitting a completion certificate. So, there are no worries about collecting account receivables. Cash flow is dramatically improved. It’s a win-win situation for the homeowner and dealer alike!

So clearly, financing for remodeling type projects has taken a turn for the better since the days when it totally dried up after the collapse of the housing market. Perhaps these financing tools are the medicine that window dealers can use as a cure for an otherwise sluggish market that currently exists in many parts of the country.

So, dealers and manufacturers alike, take note. Offering an effective financing program can make the difference when it comes to having a year of growth as opposed to what may otherwise be a lackluster year!

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