Should a Small Deck Builder Offer Customer Financing?

Should I offer financing as a small deck builder?

Yes, if your deck quotes are big enough that customers hesitate at the total and you can offer financing without becoming the lender yourself. If most of your work is small repairs and railings, financing is probably more setup than it's worth.

Here is a quick test. Pull your last 10 quotes and mark the ones that went quiet right after the customer saw the price. If the quiet ones cluster at the top of your price range, the problem is probably how the customer pays, not how you sell. If they went quiet because of slow follow-up or a cheaper bid on a smaller scope, financing will not fix that.

Three rules keep it simple:

• Offer it only on jobs above a price you pick, the point where a monthly payment helps the customer say yes.
• Never carry the customer's balance yourself. If you float materials and labor while they pay over months, you are the bank.
• Don't order materials until the money is confirmed, either by funded financing or a deposit.

Does offering financing actually help me close bigger deck jobs?

Often it does on the bigger jobs, because a customer who likes your quote but can't write one big check now has a way to say yes. It matters less on small jobs that people pay for out of pocket.

If you want numbers, one remodeling trade article reports that offering financing raised close rates 18% and job sizes 30% (JLC). I can't tell from that how it applies to a 3-man deck crew, so check it against your own quotes. If you want a sense of demand, in a 2023 Modernize.com survey of over 3,100 homeowners, more than 25% planned to finance home improvement projects by borrowing from their contractor (Joist).

Bringing it up without sounding pushy is mostly about timing and wording:

• Put the payment options on the estimate itself, so it reads as normal and not a rescue.
• Mention it once, at the walkthrough, right after you give the scope and total.
• Say something plain like: "Most customers at this size either pay in stages or use a payment plan. Want me to show you both?"
• Don't ask about credit or income. The lender handles that with the customer directly.

What do lenders ask for before they'll let me offer financing?

Usually they want proof of a real business: how long you've operated, your license and insurance where your state requires them, a minimum sales volume, and a credit check on you as the owner. Requirements vary a lot by lender, so ask each one for the list in writing.

Get these together in one folder before you apply:

• Business name, address and tax ID
• Your contractor license or registration, if your state requires one (your state's contractor registration office can tell you)
• A certificate of insurance (your insurance agent can send it)
• Business bank account details, since the lender needs somewhere to send your money
• Two or three recent jobs, with photos and signed contracts if you have them
• Your yearly sales, as best you can show them

The customer applies separately, on their phone or at the table, and you usually only see approved or declined. That keeps you out of their finances, which is where you want to be.

What if I don't hit the sales minimums the big lenders want?

Look for finance partners that work with small contractors, or skip lender financing and use deposits and staged payments. Plenty of three-man crews run entirely on a clean payment schedule.

Before you give up on a lender, ask these four questions:

• Is there a minimum yearly sales number, and does it apply to new or small contractors?
• Is there a minimum time in business?
• What fee do I pay per financed job?
• How many days after the job is approved and funded until I get paid?

Some field service apps, such as Jobber and Housecall Pro, pitch financing as an add-on to quoting and invoicing. Bigger platforms like ServiceTitan are built for larger, multi-crew companies and may be more than a small deck builder needs. Compare the options on what matters to you:

What does financing cost me per job, and who pays it?

Lenders usually charge the contractor a fee on each financed job, and whether you absorb it or build it into your price is your call. Fee structures vary by lender and loan terms, so get the exact number in writing before you quote.

Here is a worked example with made-up numbers. Say a $30,000 deck is financed and the finance partner charges you a 6% fee. If the fee is 6%, you pay $1,800 on that job. Say the job was priced to leave $7,500 in profit before the fee, then if the fee is $1,800 you keep $5,700.

You have two ways to handle it:

• Build a small cushion into every deck quote, so the fee is covered when a customer finances. The downside is that cash customers help pay for it.
• Price financed jobs knowing the fee is coming and decide job by job if the margin still works.

Rules on how you can show or pass along fees, or price cash differently from financed work, vary. Ask your accountant or your state's contractor registration office before you advertise anything. Run your numbers through the free job cost calculator so you know your real profit before and after the fee.

Can I do staged payments instead of financing?

Yes. A deposit at signing plus payments tied to visible progress is the simplest fallback, and you can start using it on your next quote.

For example, here is a schedule for a $30,000 deck. These numbers are made up, so adjust them to your own costs.

A few rules make this work. Tie every payment to something the customer can see, not a date. Make the deposit big enough to cover the materials order so you never float lumber. Keep the last payment large enough that the customer cares about the punch list. Some states limit how large a deposit can be, so check with your state's contractor registration office.

The customer also gets a way to spread the cost over a few weeks, which answers the "I can't swing it all at once" objection for many people. In MagicBuild, Magic can build the estimate from a photo and a description at your own prices, the client signs on their phone and can pay the deposit by card or bank, and invoices can be paid online. If you'd rather do it by hand, the free invoice template works for each milestone.

What happens to my job if the customer's financing gets denied or delayed?

If you haven't ordered materials or held a crew slot without a deposit, a denial costs you little. The trouble comes when you start before the money is confirmed.

Protect yourself with a few steps:

• Put a decision date in the estimate, for example "this quote holds for 7 days."
• Ask the customer to apply at the meeting, not later, so you learn the answer fast.
• Write into the contract that your start date depends on funds being released or the deposit being paid.
• Hold the schedule slot only until the decision date, then offer it to the next customer.

If the customer is denied, don't lose the job. Offer your staged payment schedule the same day, or split the work into phases, for example footings and framing first, railings and stairs later. Have both ready before you ever send the quote.

If you want one place to run estimates, deposits, crew check-ins and job profit, what MagicBuild does is worth a look, and it works in English, Portuguese and Spanish. It costs $69 a month, crew and clients don't cost a seat, and you can start a free trial for 14 days. You can also just use the free job cost calculator and invoice template to tighten up your payment terms.