With people spending a lot more time in their homes during the COVID-19 pandemic and wanting to upgrade their spaces, the remodeling industry has been on fire. According to the 2022 Remodeling Impact Report, a joint study from the National Association of Realtors and the National Association of the Remodeling Industry (NARI), 90% of NARI members found a greater demand in remodeling contracting work during the pandemic. And 60% of NARI members reported the size of the projects increased.

The work-from-home trend isn’t looking likely to diminish much post-pandemic, so the remodeling boom could last for quite a while. But it’s also facing lots of headwinds: increased costs for labor and materials, and supply chain delays. Contractors need to be savvy about offering financing if they want to harness the increased consumer demand to boost their business. Here’s how financing can give you an upper hand.

1. Bring in more sales while delighting customers. Not everyone can afford to pay upfront or put it on their cards, especially because inflation is hitting consumers’ wallets too. If you can offer your customers financing options, it can mean the difference between achieving their remodeling dreams and having to walk away. It’s a clear win-win: more sales for you and happy customers who can go through with the renovations they’ve been wanting.

Customers with access to financing might also be able to afford extra projects and upgrades, which could boost your sales. And helping them realize their remodeling dreams through financing means you’ll have loyal customers and great word-of-mouth advertising for years to come.

2. Be more competitive. In today’s market, you need every advantage to compete with other contractors in your area. Taking advantage of financing — especially if you can offer credit approval at point of sale — can give your business a leg up over competitors who aren’t doing that.

“Offering financing changes the conversation with your prospective customer,” says Don Kluthe, COO and president of AmeriFirst, a division of First National Bank of Omaha. “When a homeowner knows they’ll be able to get funding for a project with an affordable monthly payment, you’re going to close more deals than contractors who don’t offer these options.”

3. Get extra benefits for your customers and you. Giving your customers financing options has even more benefits. For example, when customers pay with a card, you might have to charge them more to cover the associated fees. But there are financing deals you can find at no or low cost to you so you don’t have to pass those types of costs on to your customers. And being able to finance a project, rather than paying upfront or putting it on a card, means your customers have set monthly payments to clearly understand the impact on their monthly budget.

Finding a great financing partner can also mean extra perks for your business. Look for financing providers that don’t charge you steep discounts and can offer you other types of financial incentives. For example, the First-Look Rewards program from AmeriFirst pays contractors 1% of the balance of every funded loan if they use the company as a first-look lender, which can add up to 10% to the profit margin.*

Learn more about how First-Look Rewards from AmeriFirst can help your business.

*Claim refers to increasing net profit margin. “Up to 10%” is based on National Association of Home Builders’ estimate of 5.3% average net profit margin set forth in The Cost of Doing Business Study, 2020 Edition.