Why home improvement contractors should offer customer installment plans

Home improvements can be a transformative and exciting experience, helping your customers bring their dreams to life. But for many homeowners, upfront costs can be the main hurdle, often delaying or even forgoing projects altogether. For residential contractors, it is important to help potential customers understand their buying power and choose home projects that fit their needs. This is a win-win for providers and homeowners, as survey research* shows that younger consumers are more likely to undertake home renovation projects (60% of millennial homeowners and 56% of Gen Z homeowners), especially in pursuit of customizing their spaces to their personal styles.

Further, remodeling projects are top-priority for US homeowners, according to research from Harvard University’s JCHS.* In 2023, Americans spent $373 billion on home improvement projects, primarily focused on replacing interior appliances and updating kitchens/bathrooms. This represents a huge opportunity for home contractors to generate new business by making the costs of home projects more accessible. So how can these businesses help customers bring their dreams to life?

Point-of-sale lending helps customers say “yes” to home improvement projects

When potential customers are deciding to take on a home improvement project, they are not just assessing various contractors to complete the work – they are also considering if their budget only allows them to undertake DIY efforts rather than hiring a professional. Research from the National Association of Realtors* shows that only 29% of homeowners who participated in the 2025 Remodeling Impact Report survey hired a professional to complete their entire project – the rest completed some or all of the project on their own. Since project decisions ultimately come down to budget, home contractors can increase their pool of potential customers by offering installment plans and financing pre-approval – showing customers that their home improvement aspirations are more in reach than they may initially think.

Rather than paying for projects in full, up front (or putting the burden of long-term payments onto the contractor), point-of-sale (POS) lending tools like U.S. Bank Avvance® allow customers to choose flexible terms for spreading the cost into manageable monthly payments. Potential customers can also apply for lending pre-approval, so they know how much they qualify for during the planning phase of their home project. By spreading costs over time, you make large projects possible for your customers without budget constraints, giving them access to:

• Better quality materials and project results, without sacrificing their budget.
• Improved customer experience via flexibility and convenience, with repayment terms up to 84 months.
• Enhanced communications from integrated lending tools and digital engagement with customers.

Avvance helps home contractors position their businesses for growth

POS lending isn’t just helpful for customers or attracting new business – home contractors can take charge of their cash flow management and streamline invoice reconciliation. By embedding customer installment plans in their point-of-sale (POS) solution, home contractors are able to offer customer flexible financing options without actually taking on the financial burden of longer payment timelines. Better yet, contractors don’t have to wait to get paid – Avvance sends full compensation to businesses within 48 hours and then administers the installment plan for the duration of the customer’s payments. That means that contractors have better cash flow management from project to project, without sacrificing customer experience.

Further, offering customer installment plans helps streamline invoice management and reconciliation for home improvement providers. Gone are the days of paper invoices and checks; with Avvance, all customer payments are managed through a digital portal that accepts numerous payment types from customers. Contractors can spend less time chasing paper invoices and checking the mail for checks, and more time running their business and taking care of their customers.

Help your customers get started with POS lending options for their projects

Getting started with flexible financing is easy. Home contractors can integrate Avvance with their POS solution, so that customers can either opt into an installment plan at the payment stage of a project or get pre-approved during the planning phase of a home project. Businesses should feel confident explaining how POS lending works and helping customers choose the right plan for their budget. This includes:

• Understanding the payment terms: Educate customers on the payment terms, interest rates, and any fees associated with the installment plans they choose. Their eligibility is based on price and creditworthiness. When customers apply for an installment plan, Avvance performs a soft credit check to review their financial history and current situation to assess their ability to pay for installments over time. This check has no negative impact on customers’ credit scores.
• Planning budget: Avvance offers monthly payment options that are tailored to fit the customer’s budget. Help your customers understand the best option for their home project, as well as anticipating future expenses outside of the flexible financing plan. All interest rates and financing fees are dependent on the amount offered, your soft-credit check results, and your selected payback period plan.
• Monitoring monthly payments: Remind customers to keep track of their payments schedule and to stay on track to avoid any late fees (if applicable). Customers can also opt for digital communications from Avvance to remind them of upcoming payments.

The home improvement market is vast and full of opportunity. Home contractors can position their businesses for growth by offering flexible financing options to customers for large projects – ultimately, boosting the customer experience while streamlining business management behind the scenes.

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