Last year, Bradford White teamed up with Fortiva Retail Credit to allow contractors to offer financing to the “second look” customer, those customers with a lower than “good” credit score. And there are a lot of those customers – more than half of the U.S. population has less-than-prime credit profiles.
PHC News conducted a webinar on the new Bradford White service with Judy Munden, who has been in charge of corporate development at Fortiva for the past five years.
The Fortiva deal allows contractor customers to get fast, easy financing up to $40,000 for a Bradford White water heater, plus installations, products, repairs, warranties and all other service work customers might need.
We talked to Munden after our webinar to share more details on the program.
Q: Tell us about Fortiva and how it ended up partnering with Bradford White.
A: Founded in 1996, Atlanticus, Fortiva Retail Credit’s parent company, is a financial services holding company specializing in providing consumer payment solutions through a national network of established retailers and contractors.
Several of our contractors sell Bradford White products. From the contractors, and interaction with Bradford White at various events, we learned they wanted to provide their contractors with a consumer retail financing program enabling them to close more sales. It was important the lender be able to offer a full spectrum lending program with financing options for the most credit worthy consumers through those having less-than-prime credit profiles.
Fortiva Retail Credit was selected by Bradford White as our program provides contractors and their customers great financing options plus instant credit decisions in a secure paperless environment, so our program is extremely user-friendly. Fortiva is excited to partner with Bradford White to bring contractors expanded financing options for their customers. They are innovators, not just in terms of product technology, but in providing their contractors with support, education and programs that facilitate a contractor’s success.
Q: Fortiva focuses on financing the "second look” customer. What should contractors know about the customer who needs such financing?
A: Fortiva has lending options for consumers with wide ranging credit profiles. Our ability to consider applicants with below-prime credit profiles help our dealer partners close sales while building customer loyalty. With 62 percent of Americans having less than $1,000 in savings and knowing that a large portion of the U.S. population has less-than-prime credit profiles (51 percent according to Forbes.com and Nerdwallet), it is important contractors have payment options to offer their customers.
Nobody saves for their water heaters to stop working or to handle other emergency home repairs that arise. Being able to provide financing options helps contractors capture more, typically larger, ticket sales.
Q: Is the program limited to just selling Bradford White equipment?
A: Once contractors are enrolled to offer Fortiva’s financing program they can finance any product or service their business installs or services. Bradford White wanted their contractors to have a program that wasn’t just limited to Bradford White equipment. They know their products might just be a portion of the total job contractors are performing.
Q: What are the major benefits the contractor gains by offering this financing?
A: Contractors offering financing have an edge over the competition. A recent study conducted by First Annapolis, a management consulting firm owned by Accenture, showed that 42 percent of consumers seek businesses with financing. If customers are trying to decide which contractor to call and they see one advertising “financing available” chances are the potential customer is going to call that contractor.
Financing also lets contractors control the sale. Being able to estimate the job then assist customers in applying directly with Fortiva to receive an instant credit decision is important in closing the sale and getting the work scheduled. Customers know they are set and do not have to seek additional estimates.
Building customer loyalty is a huge benefit to contractors. Fortiva provides approved applicants with revolving lines of credit they can use with the contractor in the future. Knowing they already have an established payment option with the contractor keeps customers coming back and provides a wonderful remarketing opportunity for the contractor.
Q: What are the commonly asked questions that a customer would have about this type of financing?
A: In addition to “What’s my payment or interest rate?” some customers wonder if they will qualify or if applying for credit will impact their FICO scores. Since Fortiva’s program involves a “soft” or “promotional” credit inquiry there should not be an impact to the applicant’s credit files. Our program can consider applicants with credit profiles into the mid-500 FICO range. Contractors are able to put customers at ease by letting applicants know Fortiva considers applicants with varying credit profiles
Sharing personal information is another customer concern. Fortiva has a secure application platform. Customers can enter their own application information and no data is retained on the contractor’s device. Applications can also be submitted via phone directly to Fortiva’s call center so the information exchange is between Fortiva and the customer, and not disclosed to the contractor.
Q: Can you describe the basic options the plan offers in terms of interest rates and months to pay?
A: Bradford White negotiated a program that offers approval limits up to $40,000 with customer APR’s as low as 9.9 percent and repayment terms out to seven years. Offers come with either a deferred or non-deferred interest option.
Fortiva’s program is unique in that we don’t take into account the amount an applicant wants to borrow, moreover we utilize a proprietary scoring matrix to determine the limit, term and APR for which an applicant is qualified. Offer terms vary depending on where an applicant falls within Fortiva’s proprietary scoring model.
Q: Can you tell us more about the actual process of applying for financing?
A: Fortiva’s financing program is extremely user-friendly for both contractors and their customers. The majority of in-home sales applications are submitted via smartphone or tablet, while some contractors and customers prefer to call applications into Fortiva’s call center, which is open seven days a week.
Providing instant credit decisions combined with a paperless process, contractors can easily embrace Fortiva’s program. If customers provide an email address then disclosures are provided to them via email. Contractors don’t need to submit any paperwork to receive funding either. They simply release the transaction for funding within Fortiva’s system and are funded within one to two business days.
Q: What do contractors need to do to offer this financing?
A: To get more information or enroll as a dealer partner with Fortiva contractors can visit www.bradfordwhite.com/fortiva-contractor and select the “Sign Up Now” button.