Full-service fuel marketers need to offer customers good options for financing purchases of heating and cooling equipment, or they risk losing sales, according to a prominent energy efficiency financing expert.
Peter Krajsa, Chairman and CEO of AFC First Financial Corp., of Allentown, Pa., recently discussed the essentials of energy efficiency financing with Oil & Energy. He said affordability is an important concern for many homeowners as they consider installing high-efficiency equipment, so it is important for marketers to provide options.
Most consumers prefer the certainty of a fixed interest rate and fixed monthly payment, and many are reluctant to invest in an energy efficiency upgrade if the only options offered by a contractor are to pay in cash or take out a variable rate loan, he said.
Whether the upgrade is prompted by an equipment failure or by a proactive desire to modernize the home and reduce energy consumption, the customer might look to the contractor for financing. The best solution, according to the AFC First CEO, is to offer a simple, unsecured loans with minimal paperwork for both the contractor and consumer, such as AFC First Financial’s national EnergyLoan® program, which offers a long-term fixed rate, making it like an automobile loan.
“The most successful contractors offer consumers all the different ways to pay,” Krajsa explained. If the contractor can offer choices and simply ask how the customer how they would prefer to pay, they remove the largest obstacle to a sale without forcing the customer into an uncomfortable choice. Without good financing options, contractors will leave deals on the table, he said.
Contractors have a tremendous influence on a customer’s decision on how they will pay for an energy efficiency upgrade, he noted. They should learn how to make affordability of energy efficiency a key part of every sales proposal and evaluation. The financing programs themselves should be simple, fast and easily communicated.
All contractors want a customer loan program that offers low interest rates and fast approval, Krajsa said, and AFC First Financial strives to meet those needs, with state-specific programs like the Pennsylvania Keystone Home Energy Loan Program as well as its national EnergyLoan program. AFC First Financial is great at serving heating and cooling contractors, because it understands the energy industry and its contractors, he said.
AFC First Financial is selective about its partners and looks for companies that are ethical and financially stable. As such, a partnership with AFC First Financial serves to endorse the contractor, according to Krajsa.”It’s like a Good Housekeeping Seal of Approval if you are approved by us,” he said.
In addition to its state-affiliated loan programs, AFC First Financial manages a network of 5,000 approved energy efficiency contractors. For information, visit afcfirst.com or call 610-433-7486