How Financeit is partnering with builders to fund their clients’ home improvement projects
Sonny Belanger of PLANiT Builders, Calgary, is one of an increasing number of contractors who have partnered up with Financeit, a "merchant direct" credit facility that is providing funding to 70 per cent of his clients.
June 23, 2015 by John Bleasby
You’re a builder. You want to grow your business. But at the same time, growth can mean increased administration costs and collections issues. Perhaps you lose business because potential customers get bogged down with financial approval for a renovation, repair or addition. What do you do?
Sonny Belanger of PLANiT Builders in Calgary thinks he’s found the solution: a partnership with Financeit, a fast growing Canadian loan intermediary that allows builders instant and direct on-line access to consumer financing. It’s been a perfect fit for PLANiT, with their focus on garage construction and basement renovation.
Like many contractors, Belanger often found the approval process at traditional banks too slow. Credit applications took 24 hours or more, sometimes with requests for follow-up meetings. “It’s a fast-moving city; people want to make decisions quickly and move on with their lives. Financeit’s software allows us to confirm financing on the spot, literally in seconds.” For Belanger, putting these financing tools directly in his hands is unique and has given his business a marketable advantage.
What kind of customer needs Financeit? Typical clients are young first-time home owners and dual-income professionals. They have good cash flow, yet hold insufficient equity in their homes to leverage a secured Line of Credit at a traditional bank. “They come to us for convenience, transparency and extremely competitive rates,” explains Financeit Director of Sales Dave Murray. “Through our builder partners, they have access to our credit facilities 24/7. Their personal financial information can even remain confidential from the builder, depending on the application. After approval, our customer service personnel look after them right to the end of the loan period.”
Financeit started its merchant-direct financing programme in 2011 and has grown rapidly in Canada with parallel programmes in auto and marine/RV loans. “We are a technology platform, partnered with multiple financial institutions standing behind us.” The company’s main thrust today is the home improvement market. Financeit offers unsecured, 5-year fixed rate loans up to $60,000, amortizations up to 15 years, and open monthly payments tailored to the client. Interest rates are comparable to new car loans, ie. well below credit card rates or ‘lenders-of-last-resort’.
Most Financeit partners receive guaranteed payment upon project completion. Larger qualifying contactors like PLANiT receive full payment, 100 per cent upfront. The benefits of turning collections over to a finance company are potentially enormous, as any small to medium size contractor would recognise. Even dispute resolution, which Murray claims is minimal, is negotiated through Financeit.
Providing instant loan approval to clients, coupled with an assurance of full payment, has had a powerful impact on Belanger’s business. He estimates 70 per cent of his clients use the facility. The resultant minimisation of his administrative costs allows Belanger to focus his efforts on growth. As proof, Belanger estimates that PLANiT currently has teams working on over 170 projects simultaneously across Alberta. “The jobs move much quicker. We don’t have to stop and wait to collect payment. Offering a full financing package as part of our services is very important; we’ve become very good it.”
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