Customer Financing for Contractors: How It Works & What It Costs
Customer financing lets your customers pay for a project in monthly installments while you get paid in full at completion. Programs differ mainly in what the contractor pays: per-loan dealer fees, a flat subscription, or nothing.
- No per-loan dealer fee — flat annual subscription
- 18+ lenders, FICO scores down to 550 served
- Soft-pull prequalification, funded in as little as 24 hours
Why contractors offer financing
Bigger tickets get said yes to
An $18,000 roof is a scary number; ~$250–350/mo (illustrative — terms vary by lender and credit) is a decision a homeowner can make today.
You stop competing on sticker price
The cheap-bid competitor quoting $14K loses to your $18K bid when yours comes with a payment option.
Cashflow
The lender funds you at completion — no floating materials on your credit card, no chasing final payments.
The three cost models
This is the whole decision. Everything else is detail.
| Model | You pay | Examples | Best for |
|---|---|---|---|
| Per-loan dealer fee | 0.5%–15.75% of every financed job | GreenSky, Service Finance, Foundation Finance, Wisetack (3.9%+) | Occasional financing, small tickets |
| Flat subscription, no dealer fee | $1,499–$4,999/yr | Hearth | Regular financing, large tickets, margin predictability |
| Free marketplace | $0 (lender pays the platform) | Acorn Finance | Testing the waters; lighter tooling |
All lending via third-party lenders; rates and terms vary by lender and customer credit.
One financed $18,000 roof at a 6% dealer fee — most of a year of a flat subscription, on a single job.
The rough break-even. Below it, pay-per-use is genuinely cheaper. Above it, flat wins.
How it works with Hearth
The 60-second version.
Send the link
Text, email, or a QR code on the quote — the financing link goes out from wherever you already work.
See offers in ~60 seconds
The customer sees personalized offers from multiple lenders — soft credit pull, no score impact to shop. Loans $1,000–$250,000, terms 2–12 years, rates from 7.99% APR, credit scores down to 550 served. Rates and terms vary by lender and customer credit.
Get funded
They pick an offer, the lender verifies and funds. You get paid like a cash job — no per-loan dealer fee.
How to launch financing in your business
Five steps. Most contractors are live within a week.
Count your financeable jobs
Look at last year: how many jobs over $5K did you bid, and how many died on price? That's your financing opportunity — and the volume number that decides step 2.
Pick your cost model
Use the table above and your real financed-job count. Break-even sits around 3–10 financed jobs a year. Under it, pay-per-use; over it, flat.
Verify what your customer sees
Soft-pull prequalification (no score impact to browse offers), multiple lender offers not a single yes/no, and coverage for your ticket size — a $25K cap is useless for a $40K roof-plus-solar job.
Put the payment on every quote
"$18,400 — or from ~$310/mo (illustrative)" on the proposal line itself. The payment isn't a fallback for when the price gets rejected; it's how the price gets accepted.
Track it for 90 days
Close rate with payment quoted vs. without; average ticket financed vs. cash. The lift tells you what financing is worth to you and whether your cost model still fits your volume.
The mistake that costs the most
Treating the dealer fee as invisible. If you're on a per-transaction program and don't price the fee into the bid, you're donating 4–16% of your best jobs to the financing company. Price it in, or pick a model where it doesn't exist.
Your top questions, answered
What does it cost a contractor to offer financing?
Depends on the model: per-loan dealer fees run 0.5%–15.75% of each financed job; subscription platforms like Hearth run $1,499–$4,999/yr flat with no per-loan fee; marketplaces like Acorn are free to the contractor with lighter tooling.
Does my customer's credit get pulled?
Prequalification on modern platforms is a soft pull — no score impact. A hard pull happens only when the customer accepts a specific lender's offer.
Do I become a lender or take credit risk?
No. Third-party lenders underwrite and fund the loan. You're never the creditor and don't own repayment risk. Hearth is not a lender; financing is provided by third-party lending partners.
What if my customer has bad credit?
Marketplace models help here: multiple lenders means broader credit coverage — Hearth's lender network serves scores down to 550. Approval is never guaranteed and terms vary by lender and credit.
Offer financing without the dealer fee.
Flat annual subscription. 18+ lenders. No per-loan cost, whether you finance 20 jobs a year or 200.
