Second Look Financing: Your Questions Answered - Foundation Finance

Second Look Financing: Your Questions Answered

You already know that offering financing to your customers as a payment option for their home improvement project is critical. Many contractors already offer in-house financing or go through a big bank to offer financing for their good credit customers. But what about the approximately 50% of people in the United States who are “credit challenged?” They cannot pay cash and don’t qualify for your in-house/big bank financing, so you will most likely lose the sale. Working with Foundation Finance prevents you from losing the sale through our second look financing program.

As the name implies, this type of financing provides a way for those customers with some credit challenges to get financing for their home improvement project. Sometimes there’s a cost involved for the contractor but this gives the company the ability to reach more customers and close more sales!

Most people know if they have “subprime” credit, so when you come back to them with an approval for financing, it increases customer satisfaction.   

If you’re new to second look financing, you may have some questions about how it  can work for you. Below we answer some of the most common questions.

Do all approvals have a risk discount?

No! Risk discounts are only applicable to Tier 3 approvals. Tier 1 & 2 will always be at 100%.  The only fee that would apply is if you select a promotional program that has a fee to you.

Can I accept a down payment?

Yes. Any down payments will go directly in your pocket with no discount removed.

On discounted bids, what determines the risk fee? How can I get the best approvals?

FFC is not strictly a “FICO score” lender.  We look at credit and application factors to determine what tier a customer qualifies for.  Getting joint credit applications whenever possible and accurately listing all income will help with getting better approvals.

Can I pass along the discount to the customer?

No. According to the Truth in Lending law, you are not allowed to pass along the cost to the customer.

For example: On a $5,000 sale approved at 90%, the customer will owe $5,000 but the dealer is funded

$4,500.  If you collect the $500 from the customer, they would then be paying $5,500 for the deal.

Foundation Finance is a full-service lender so they can help you with your good and challenged credit customers!  The second look piece of the program is especially helpful to contractors because it gives them more overall approvals!

Get more information on FFC’s Second Look Financing program here.

P.O. Box 437
Schofield, WI 54476

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