Most lenders in the home improvement financing space are considered “approve or deny lenders.” This means they approve or deny applications for credit solely based on the customer’s credit score – which typically needs to be prime. So, what happens to customers that have average credit or credit with a few hiccups? That’s where second look financing (also known as discount financing) comes in. At Foundation Finance, we can approve customers with a wide variety of credit; we also have a great second look financing program.
Instead of denying a customer because their credit is weaker, we can approve at a discounted bid meaning you (the contractor) will pay a risk discount fee.
Here’s an example:
$5,000 sale to a customer with weaker credit.
Turned down by an “approve or deny lender”.
FFC approves the loan at a 90% (10% risk discount for the dealer). *
Customer still finances $5,000 for the project.
Dealer is paid $4,500 at funding time.
Why accept a discounted bid?
- Close sales that other lenders decline – build your bottom line.
- Some profit is better than none or even just covering expenses.
- Get future business from existing customers for projects or service. For instance, this year the customer needed new windows. Two years from now they may need siding.
- Increase referrals – happy customers are likely to recommend you. If you’re able to finance a project for them that another company is not – it’s win/win.
Let Foundation Finance show you how we can make second look financing work for you. Call us at 855.241.0024 ext. 5012 or email
*Discount fees are based on the customer’s credit and application information.