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5 things you need to know about solar financing

It’s been nearly 2 weeks since our last webinar on solar financing, yet we’re still getting great feedback and follow-up questions nearly every day! So to spread the knowledge, we figured we’d repackage some of the great insight that came out of your crowd-sourced questions to bring you 5 big takeaways from our financing 101 webinar.

It’s not just about money – it’s about security.

As our CEO Lennie pointed out, solid financing options are a sure-fire way of looking professional and earning credibility, but beyond that, they’re essential to solar contractors covering their daily costs.

“One of the key things is you want to make sure you have a safety net to pay for things like materials, bills, building permits – there are all of these hidden fees involved in the day-to-day business and you want to make sure you’re protected.”

It’s not just about rates – it’s about terms.

Sure, being able to offer great financing rates is definitely going to help you secure more work. But it isn’t realistic to expect amazing rates right out of the gate. Reduced rates only come as you establish your credibility and experience with your financing partner by building up your portfolio, showing your work and start bringing in more work. In the meantime, there are other terms you should be looking for.

 “It’s important to know how you’re going to receive the money. What are the terms? When are you going to get the money as the installer? Are you going to get it at the end of the installation? 50% once it’s signed and 50% at the end? That cash flow can make a big difference, especially for newer installers.”

It’s not just about options – it’s about relationships.

So if you want to look credible and well-established, you’ll want to secure as many financing partners as possible…right? Nope. According to Lennie, you’re much better off building a solid, long-term relationship with one or two partners than trying to spread yourself too thin.

 “If there’s one thing I’ve realized in this industry it’s that you only have a name – if you burn it, people won’t want to work with you. Every time you apply for a new lender, that appears on your credit file. Financing partners really prefer to be your first choice, or first-look lender. It’s like any partnership, most companies rather not be second-look lenders if you’re trying to build a relationship with them and get better rates.”

 It’s not just about being flashy – it’s about trust and transparency.

Deciding to spend thousands on any home improvement project is always a big leap for the average homeowner, but the best way to fight the fear and intimidation that can come with such an important decision is to help people feel like they have all of the information they need to make the right decision. Having a few different financing options integrated in your Solargraf platform is a great way to help those homeowners feel empowered.

 “One of the features we’ve found makes homeowners most comfortable is the ability to compare 2 different financing options side by side, in real time. So if, for example, you have a 25-year loan and another cash financing option, you can simply click on one of the options and then scroll down to show the homeowner how much that option is going to cost them month-per-month, year-per-year with all of the interests and incentives included. You can also see how it’s going to affect their energy production, their monthly energy costs – everything. That kind of real-time transparency really helps build trust and confidence.” 

It’s not just about financing partners – it’s about financial incentives.

Ok, so this is slightly cheating as it’s not technically about securing a financing partner, but quite a few attendees mentioned they’d started using this tip, so we’re adding it to our list.

“I don’t see enough people using this, but basically, you can create custom incentives for when you think a potential client is really going to drag things out. Go to settings and create a financial incentive for a 48h signature, or for signing at the end of the week. I was always amazed at how impactful a few hundred bucks off could be for homeowners that were still on the fence.” 

Curious to see how Solargraf can help put these great tips into practice?

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Topics: financing, Solar Business, Business growth, Resources, webinar