How Contractor-Facilitated Financing Is Changing Close Rates on Mid-Ticket HVAC and Plumbing Jobs
More HVAC and plumbing contractors are embedding financing at the point of sale. Here is what the numbers say and what operators need to know.
A $9,000 heat pump replacement or a $6,500 water heater and repipe combo sits in an awkward spot for most homeowners. Too expensive to pay out of pocket without a second thought, not expensive enough to trigger a formal home equity conversation with a bank. That gap is exactly where contractor-facilitated financing programs have moved in over the last several years, and the effect on close rates is real enough that ignoring it is starting to cost contractors money.
The Federal Reserve's 2023 Survey of Household Economics and Decisionmaking found that 37 percent of American adults could not cover an unexpected $400 expense with cash or its equivalent. Scale that up to a $7,000 HVAC job and the math is straightforward: without a payment option at the table, a meaningful share of qualified, interested buyers walk away or delay, sometimes indefinitely. For more on the topic discussed above, see Home Services Nation.
What the Financing Programs Actually Look Like in the Field
Most of the programs contractors use today run through third-party lenders rather than the contractor carrying the paper themselves. GreenSky, now a subsidiary of Goldman Sachs following a 2022 acquisition, and Synchrony Financial are two of the larger players specifically active in the home improvement and HVAC space. Both operate on a dealer-fee model, where the contractor pays a percentage of the financed amount to buy down the consumer's interest rate, often to a promotional zero-percent tier for 12 to 18 months.
That dealer fee typically runs between 6 and 12 percent depending on the promotional term and the lender. On a $9,000 job financed at a 7 percent dealer fee, the contractor nets roughly $8,370 before any other costs. Some contractors build that fee into their standard pricing. Others treat it as a cost of doing business on jobs they might otherwise lose. Both approaches are defensible depending on your market and average ticket, but only if you have actually run the numbers on your own close rate before and after adding financing to your sales process.
Contractors who present financing early in the appointment, rather than as a last-resort offer when the customer hesitates, consistently report better results. The framing matters. Presenting a monthly payment option alongside the total price treats the customer as a capable adult making a financial decision, which is different from deploying financing as a pressure tactic when someone objects to price.
There are compliance considerations worth knowing. The Consumer Financial Protection Bureau has authority over point-of-sale lending and has scrutinized dealer-fee structures and disclosure practices in recent enforcement actions. If your sales team is presenting financing options to customers, they should be using the lender's approved scripts and disclosure language, not improvising.
The practical takeaway for operators is this: if you are running HVAC or plumbing jobs in the $5,000 to $15,000 range and you do not have a financing option available at the appointment, you are probably losing a measurable percentage of closeable jobs. Quantify your current close rate, add a program, and measure again over 90 days. The fee structure is a real cost, but so is an unsold job.