Home improvement and HVAC financing for retailers and contractors

What makes home improvement and HVAC financing different?

Home improvement sits between retail and service work. The ticket is larger than most store purchases, part of it is labor, and the sale often happens in the homeowner's living room instead of on a sales floor.

Many of these projects are not planned. When the furnace fails in January, the homeowner has not budgeted for it. The Federal Reserve found that 63 percent of adults would cover a $400 emergency expense using cash or its equivalent, which means more than a third would not. A replacement system costs far more than that.

Source: Federal Reserve Board, Economic Well-Being of U.S. Households in 2024, released May 28, 2025.

How does financing work in the home or showroom?

The steps are similar whether the seller is behind a counter or at a kitchen table. What changes is the device and the timing.

1. The seller presents the payment with the price. "Most homeowners check what they pre-qualify for before deciding."
2. The homeowner picks a path. See If You Pre-Qualify, or No Credit Needed when the seller offers it, on the seller's tablet, through a text link or QR code on the proposal, or from a hosted application launched from the POS in the showroom.
3. Pre-qualified offers appear. By default, offers from more than one provider can show side by side. If the traditional waterfall setting is on, they appear in your order: prime, then near prime, then No Credit Needed. If a lender declines, the application is routed to another applicable lender, if one is available.
4. The seller checks the pre-qualified amount against the full project. Equipment, materials, installation, permits and removal of the old system.
5. The homeowner selects an offer and completes the provider's full application. The provider shows a confirmation with the available limit. Its full application may ask for employment, debit card and/or bank details. The homeowner agrees to the provider's terms and submits. A lender may run a hard inquiry at this step.
6. The seller finalizes the sale in LendPro. Create the invoice and send it for e-signature, in person or by text or email link.
7. Settlement is processed on delivery. Settlement is processed in LendPro when the customer receives the goods or service. On an install job, confirm with each lender what counts as completion before you schedule the crew.

Where the provider supports pre-qualification, it uses a soft pull and won't affect credit scores. A lender may run a hard inquiry if the homeowner accepts an offer. A pre-qualified amount is subject to the lender's final approval and is not a guarantee of approval.

Configure financing for each sales channel. Online and in-store lender availability, application requirements, and results may differ. LendPro works with the retailer to establish the appropriate configuration for each channel.

Does lease-to-own cover installation and labor?

Usually not. Lease-to-own generally covers goods, not labor or services. That matters more in home improvement than in almost any other category, because a large share of many tickets is installation.

• Goods-heavy tickets. A window unit, a water heater picked up at the counter, or flooring material sold without install can fit a lease-to-own program, depending on the provider.
• Labor-heavy tickets. A roof, ductwork, a full system changeout or a remodel is mostly labor. Do not present lease-to-own as a way to pay for that labor.
• Mixed tickets. Ask each provider how it treats a ticket that combines equipment and installation before you go live.
• Loan programs. Whether installation and services can be financed with a loan depends on the lender and program. Confirm with each lender.

Lease-to-own is a rental-purchase agreement, not a loan. Total cost is higher than the cash price. Each provider sets what it will cover. See the lease-to-own definition.

Which lender tiers fit large home improvement tickets?

LendPro's network spans 18+ lenders and 25+ lending programs; see how the tiers work in waterfall financing, and ask for the current lender lineup for your state during a demo. Each lender sets its own approval criteria, terms, limits and what it will finance. Availability varies by retailer, state and purchase. Lease-to-own is a rental-purchase agreement, not a loan. Total cost is higher than the cash price.

Longer terms are what make a large project fit a monthly budget, and term length is set by the lender and program, not by LendPro. Read more on prime, near prime and subprime lenders.

Multi-lender or traditional waterfall: which should you use?

LendPro supports two routing settings. The retailer or contractor chooses one, and LendPro configures the flow for each location.

• Multi-lender (the default). One application goes to several lenders at once, and pre-qualified offers from more than one provider can show side by side. The homeowner compares payments and picks one. This suits in-home sales, where the advisor has one visit to get an answer.
• Traditional waterfall. Prime first, then near prime if prime declines, then No Credit Needed. This suits a seller with a preferred prime partner or a promotion it wants every qualified homeowner to see first.
• No Credit Needed from the start. In either mode, the homeowner can choose No Credit Needed when the seller offers it, which skips the primary lenders and goes straight to no credit needed providers. The provider's full application may include a check with the credit bureaus and/or alternative credit sources.

Changes are requested through LendPro and can be limited by lender agreements and program requirements. See multi-lender financing and waterfall financing for the detail.

How do a $900 repair and a $15,000 system differ for financing?

A service repair and a full system replacement are very different tickets, and each lender sets its own limits and terms. Review your lender mix for those ticket sizes with LendPro. LendPro uses a financing flow configured for each location based on the lenders assigned to that location and the requirements of those programs. Contact LendPro to review configuration changes.

If a homeowner wants a higher amount after an approval, for example to add a second zone or upgrade the equipment, they start a new application.

What rules apply to in-home financing sales?

Selling in the home adds obligations that a showroom sale does not. Two to know:

• The FTC Cooling-Off Rule. For covered sales of $25 or more made at the buyer's home, the buyer can cancel until midnight of the third business day after the sale, and the seller must give notice of that right and two copies of a cancellation form at the time of sale. Plan install dates and settlement around that window.
• Payment advertising. A proposal or yard sign that says "or $129 a month" is a payment ad and can require federal Truth in Lending disclosures. Lenders set promotional terms and required disclosures, so get each lender's approved wording first.

State rules on home improvement contracts and in-home sales vary. Check with your own counsel.

Source: FTC, Buyer's Remorse: The FTC's Cooling-Off Rule May Help.

What should home improvement sellers measure?

• Applications per proposal. Compare Daily Applications by location and associate with the number of proposals written. Advisors who present financing late show up here.
• Approval rates by lender. The Approval Rates report shows pre-qual and full-app approval rates and average approval side by side.
• Coverage of the full project. Export to CSV and compare average approval with your average installed ticket. This is your own analysis.
• Results by advisor and location. Sales Performance shows results by store, associate and customer, when Employee Tracking is on.

LendPro's go-live SLA is 10 business days. Timing depends on lender activation and integration scope, and custom integrations take longer. LendPro confirms the start date and prerequisites during onboarding. LendPro can launch a hosted application from your POS through the Launch API; ask which systems are supported today. Additional integration options may be available for specific needs. Discuss your workflow, required data, and implementation requirements with LendPro during an integration call. See integrations and security.

What mistakes do contractors make with financing?

• Presenting financing after the price lands. Show the monthly payment with the total, before the homeowner says they need to think about it.
• Quoting equipment, financing equipment, forgetting the install. Check the pre-qualified amount against the whole project.
• Treating lease-to-own as labor financing. It generally covers goods, not labor.
• One lender for every ticket. A single decline at the kitchen table ends the job.
• Calling a pre-qualified amount an approval. It is subject to the lender's final approval.
• No follow-up after the estimate. LendPro notifies you when a homeowner applies, and for 30 days after pre-qualification its marketing tools help pre-qualified homeowners return to complete the lender's full application; the lender makes the final decision. This outreach happens with the homeowner's consent; homeowners can opt out at any time (reply STOP to texts). See store alerts and follow-up marketing.

See how embedded pre-qualification and second-look financing work, read how to choose a financing platform, or book a live demo.