Q & A From Our June 2011 Webinar (Part 3)

On last month’s home improvement webinar we had the pleasure of welcoming Mark Berch on the program.

Mark is Chairman & President of Service Finance Company, a nationally licensed FHA Title I Lender.  They are a third party servicer with the ability to conduct business in all 50 states and the District of Columbia. He has spent the majority of his adult life in and around the home improvement industry.  He was co-founder and president of an HVAC company with 42 locations in 17 states. He was also founder of a home security company which operated in California, Georgia and Illinois.  His background and experience enables him to effectively marry his in-depth knowledge of the home improvement industry with his expertise in financing, thus creating the best financing options for both the home improvement retailer and the consumer.

There were a number of questions directed towards Mr. Berch on the webinar which he did not have time to address; consequently they will be answered here.

Q: Dave mentioned a company (without identifying them) that sent in 44 applications and received 35 approvals — that’s approximately 80% — with sales of over $496,000.  Were those applications submitted to your company – and – over what period of time?

A: They were submitted to our company over a 4 week period

Q: During your presentation on the webinar, you gave us an example showing an ad giving payments at $99 a month (I think).  You also mentioned the payments related to a contract of an average size, etc.  Could you repeat that and tell me if this is the disclosure that Dave spoke about?

A:  The $99 monthly payment was based on a $7500 amount financed at 9.99% with a 10 year term. You must disclose the term, APR and amount financed in your advertising. You must seek legal advice prior to publishing an ad as each state may have different disclosure requirements.

Q:  We get over 50% of our business through canvassing, shows and events.  Do your clients use a handout, a reprint of an ad or a blown up ad? Can you provide some examples?

A:  Current clients print up an 8 1/2 X 11 color ad and use that as a handout. There are several examples available on our website.

Q:  Is the enrollment process for this program very complicated (how long does it take)?

A: It will take you about an hour to fill out the enrollment forms. We will approve within 48 hours if all materials have been submitted.

Q:  Can I submit an application which was recently turned down by our current provider of finance service?  We believe our customer had fair to good credit, but the amount of the contract was simply too large.  What are the credit limits to this plan?

A: Yes, we will look at your declines to help you get started. Our maximum loan is $25,000.

Q:  How long does it take to get the average approval?

A: 5 Minutes

Q:  One of the gentlemen on the webinar who represented a manufacturer stated that one of his dealer’s customers applied online with a credit application that your company provided.  He said that many prospects don’t call  because they fear that “declined credit” will show up on their credit report later.  How does this work?

A:  It will show up as an inquiry — not a decline. The inquiry could result in an approval or a decline, but that information does not show up on a credit report.  If a consumer applies online using our private label web application which resides on the “dealer’s” website, the consumer’s credit report will show an inquiry. There will be no indication of a final credit decision, i.e. approved or declined.

In the next blog posting we will address the remaining questions from last month’s home improvement webinar.