When it comes to interest rates, customers new to the world of commercial equipment financing are susceptible to a bit of sticker shock when presented with today’s standard market-rates which range from the mid single to low double digits, depending upon the borrower (non-profit and municipal borrowers will see lower rates).
Why have customer come to expect unrealistic rates and what can we do about it?
Customers have become conditioned to promotional rates from automobile financing of 0-3%, or from mortgage rates of 3-5%. Often without the understanding that the automobile rate is in many cases provided through a buydown and that the mortgage is for a much larger, and historically, more secure type of loan than your typical equipment lease to a small business.
In the world of commercial equipment leasing contractors spend marketing dollars getting their customers in the door, but often don’t close the sale due to either a: lack of a financing solution or b: lack of a financing solution that meets consumer’s unrealistic expectations. HBC Energy Capital contends that in many cases, a better way to spend precious marketing and sales budgets would be on rate buydowns.
A contractor buydown allows contractors to offer your customers financing at interest rates that meet or exceed their expectations. You may have solved for a lack of financing, but now interest rates don’t have to be a barrier either. Here’s how you do it.
- Decide what rate or rates you want to offer: what do you think will make your customers say yes? 4%? 2.99% 0%?
- Let HBC Energy Capital know what your promotional finance rates are- we can help you understand the cost to achieve your desired rate on any project
- Build the buydown cost into your overall project cost to you’re your margins up, in other words:
Let us know how HBC Energy Capital can support you in closing more clean energy projects with financing. We specialize in supporting contractors, and managed contractor networks by providing customized financing support that gets the deal done. Contact us today, or fill out our finance request form now!