Anyone here offer financing to their customers?

[PerfiCut L&L]

Wondering if anyone offers financing of their own to customers for larger landscape work? Like most we bill monthly for our lawn care, but I wanted to offer financing to those hardscape customers where the costs involved are larger.

Instead of going through a financial insitute I was thinking of providing a payment plan of my own up to 24 months depending on the project cost.

I figure, this may attract customers that want the work done now but dont have the bank for it. And 2: it will still give me some income during the off season.

Sure their are risks, deadbeats, and what not. Perhaps a down payment of atleast 50% or 75% of the material costs, the remaining balance can be financed. I would have to think it through and come up with the specific terms, so that I wouldnt lose the entire project on a deadbeat.

Just wanted to see if any of you offer any sort of financing, and what has been your experience?

[Green-Pro]

JMO but I do lawn maintenance, landscaping, and hardscaping, not banking and particularly not lending. Sorry just sounds like one huge boondoogle to me.

[olderthandirt]

Why??? If you have enough money to finance your customer then you must have it invested getting at least 10% return. You can set your customers up with a financial institution for about the same % so what do you gain? I see where you can loose a lot but only gain 2% above what you should be getting now. Sell the financing by working with your bank to offer a good percentage rate to credit worthy customers and pay you per referral.

[gammon landscaping]

if you guess do buesness with john deer landscapes and you are in there partners program they will help you get your customers financed through john deer credit

[AGLA]

Accept credit cards. You get paid, they already have the cards, it makes it a whole lot easier for a client to spend more than he might otherwise, and you cut out a very big risk.

When it comes down to hiring you and using their Visa or your competition by taking money out of the savings account, you are at the advantage.

When you come in with a plan that they love with everything they asked for, but it is $5,000 more than they expected it is a lot easier get them to put it on plastic while they are exited about it. And there is no reason to delay - no "I don't have my check book", no "I have to transfer money", no "we need to save up just a little more". Think about how many times you bought a car over the price that you originally thought you'd pay? That was easy and you did not waste any time doing it.

There is no reason to pay banker because there are plenty of existing opportunities for your clients to use their own credit. The card is the easiest. If the credit card company won't finance them, then why should you?

[start2finish]

I made a deal with the bank..............................................................

I do the landscaping and they do all the financing.. works good for both of us.
they didn't like to get dirty anyway.payup

[J&R Landscaping]

I made a deal with the bank..............................................................

I do the landscaping and they do all the financing.. works good for both of us.
they didn't like to get dirty anyway.payup
Sounds very risky to me!!!!! If you get a customer who wants a big dream project designed and constructed and you offer them financing, they will hire you.
No offense to you or anyone else but if they want a job done bad enough, why would they turn to a contractor to give them a payment plan or something!:dizzy: If they want a big job done and they can't get a loan from the bank or use a credit card or money they saved, are you sure you want to give them financing.:confused: Sounds like that idea will cost you a lot of time (both on the jobsite and in court) and a lot more money.
I would say let the customer do the financing on his/her own! You can always refer them to a bank or lending company that you or previous customers have used in the past but I would stick do doing the landscaping end and let a bank do the financing end!!
Just my $.02

[PerfiCut L&L]

Thanks J&R,

Im actually surprised no one here offers any sort of financing, payment plans. I would think your missing out on a lot of potential customers.

[drsogr]

There is a local company that I compete against that offers financing. I have often thought about looking into offering, but like everyone else said why the extra headache? I don't need the customers that have money issues. There are so many ways to pay for things nowadays. I offer some suggestions of how other people have paid in the past, that often helps. I have also been talking with some developers about selling my landscaping when they buy the house.

[start2finish]

If there was a way to protect yourself and your cash flow, financing would be a good niche. Talk about up-selling your services. We have talked about it for years and we more or less do it with the residentail builders(not by choice) we just can not justify the risk involved. I have received information about John Deere Landscapes partners program and their financing options, but their product it no different from the other suppliers in my area and is significantly higher priced. Some peoples attitude is that we just add it to the job, well if my materials are 20-40% higher than my competition and our overhead and variable costs are identical(not likely) then they would always win bids over us. I try to keep our costs as low as possible and that leaves more jobs won with higher margins.

Good luck with the financing and look forward to hearing about it if you can make it work.

[PerfiCut L&L]

Im not looking to offer a revolving credit program, nor am I looking at offering some interst compound complicating issue. Its simple actually.

Project cost less than $5k = 50% deposit up front for materials. the remaining balance can be payed in 12 equal payments.

Project cost $5k - $10k = 65% deposit up front for materials. the remaining balance can be payed over 18 months.

Project cost over $10k = 75% deposit up front for materials, the remaining balance can be payed over 24 months.

Sample Project: Total Cost: $4800 : Materials: $1400 = Balance $3400 / 12 months = $283.00 a month.

** Stipulations: Payments must be recieved within 30 Days of monthly invoice. If at any time a payment is late, the remaining balance must then be paid off in full within 30 Days. After which, the balance will assume a 1.5% interest per month (more of a scare tactic than anything, but it will be enforced). Of course all the legal mumbo jumbo to go with it, collections agency, legal action, so on and so on.


I think this will allow home owners to get that patio, or walkway installed now and pay on it later. Just like the rest of the sales industry. Sure, people can still use their own credit cards, blah blah blah, but this allows for those credit contious customers who dont want rack up a high balance on a high intersted card, or put a ding in their credit report for future purchases due to high balances and such, to still get what they want now and pay for it later.

Of course I dont expect every customer to take advantage of this. Just want to make it available for those that may be intersted.

[sheshovel]

Nope If they haven't got a lousy $5000.00 for their landscape..They shoulden't even be calling me.
And I don't want them spending more than they have budgeted for a project.I don't want them to look out at their beutifull new space and concider it a burden.
When I am done I want them to enjoy it..not worry about having to pay for it with money they do not have.

[jreiff]

Nope If they haven't got a lousy $5000.00 for their landscape..They shoulden't even be calling me.
And I don't want them spending more than they have budgeted for a project.I don't want them to look out at their beutifull new space and concider it a burden.
When I am done I want them to enjoy it..not worry about having to pay for it with money they do not have.


Exactly, and why would someone want to have to worry about another monthly payment. Another thing to think about and worry about.

[olderthandirt]

Thats why I accept CC. Let the bank worry about about payment. Sell them on the idea of the free perks they earn using a CC.

[yrdandgardenhandyman]

** Stipulations: Payments must be recieved within 30 Days of monthly invoice. If at any time a payment is late, the remaining balance must then be paid off in full within 30 Days. After which, the balance will assume a 1.5% interest per month (more of a scare tactic than anything, but it will be enforced). Of course all the legal mumbo jumbo to go with it, collections agency, legal action, so on and so on.





Then you'll be surprised how experienced deadbeats don't care about 1.5% penalties. How many simply ignore collection agencies. How you can win a judgment but never collect a dime of it. A lien will work but it may take years. Most experienced deadbeats can't get another mortgage so they have to stay in the house they have. They keep it till they die. This is asking for trouble.
Maybe you can partner with 1 or 2 financing institution and send the client to them. Maybe you could fill out the application for them and take it to the lender.

[PerfiCut L&L]

It takes hours, sometimes days and even weeks to depending on the job to design, and install.

Only takes minutes to take back what is mine.

[Green-Pro]

It takes hours, sometimes days and even weeks to depending on the job to design, and install.

Only takes minutes to take back what is mine.


Do as you wish, what you think helps your bottom line and what aggravations you are willing to accept. Just plain old bad business IMO.

[olderthandirt]

It takes hours, sometimes days and even weeks to depending on the job to design, and install.

Only takes minutes to take back what is mine.

If your so set on doing it go for it :dizzy: :dizzy: but better check your state laws on taking back what is yours, if they paid for 50 % then they own 50%. And you can end up owing them.

[YardPro]

we are in the john deere partners program...
they will finance for us...

never thought i would work for a client that could not afford to pay cash, those were not my target customers..BUT that changed this year

had a client who spent $40K with me financed with JD...
they had just finished building thier new $800k home and were waiting on thier other one to sell.....

had there not been the option to finance i would have only been doing about $5k in work...

looking into accepting credit cards.

[Rex Mann]

We use John Deere Landscapes as our financier of choice.
Currently they offer 0.0% for 24 months or 7.9% for up to
5-years.
The client can do the on line application in about 7-minutes, and also have an answer of yes, with the terms and amounts, or no.

JD does take 3% off the top of the total deal. The client signs off on a form
after the job is completed. Fax it to JD and they take their 3% and deposit the rest electronically into my business checking account in 2-days.

We add the three percent into the mix of the proposal, so we do not take a hit


JD also will carry our account 60-days if it is a commercial job. Allows for more breathing room, at times.


Peace,

Rex

[Hilltop grading and seedi]

But a couple jobs ended up with me giving the customer a payment plan rather than force them into default. I did a couple new lawn installs, both a little over 2 acres. They THOUGHT there was enough left in their budget to pay me, but when all the bills came in, I was left out in the cold. I had a signed contract with both. BUT... They didn't have the money. I agreed in both cases to accept monthly payments, along with a carrying charge. We signed another agreement at that point. It states what my lien rights are, and what legal steps I'll be following. So far, both parties have lived up to their agreements. I make what will amount to around 12% interest over the term of the agreement.

I'd RATHER have been payed on time. My crew won't let me pay them in installments. BUT. . . Sometimes you have to do what you have to do.

But to answer your original question, no I don't offer payment plans as a regular option.

[PerfiCut L&L]

Lots of good points you all brought up and I think I will give this a second thought. Dont get me wrong, its not something I want to advertise and try to sell work on, its simply an option I have not offered in the past and in some ways seems like I may be missing out on a portion of the market that may otherwise not have either spent as mich or even at all.

Thanks for all of your opinions & comments.

I think we will stick with offering credit card purchases for the time being, and worry about our own finance options at a later date. Added headaches is definately not needed.

Thanks again everyone.

[sheshovel]

Right,I don't mind breaking up a bill in three payments or anything ..that I will do as far as working with them.But finance no no thank's