Presentation introduces a "second look waterfall" financing strategy that automatically routes applicants declined by first-look lenders through tiered backup options (Turns waterfall) to increase approvals and improve loan terms. The speaker claims approval rates up to ~94%, better offers for consumers, and lower average merchant fees (around 6.7% APR) compared with subprime-only fallback options.
As Chris mentioned in that first look range, approval rates aren't great. You know, around that 59 to 60% is not ideal. So how do you add additional layers to your financing strategy to handle that part in that problem? And that's where a second look option is super powerful and why I'm super excited to introduce the second look waterfall. Many of you have probably already heard of Turns, which we've been partnering with for many years, but up until this point, they've just been a subprime lender, which is great, you know, to save the job, you know, get that lower FICO customer some financing. However, it's not ideal because, you know, at the subprime level, you know, rates are higher for the, the consumer and also merchant fees are higher than higher for you all as well. So if you have that applicant that just barely got declined from first look, you know, the Turns waterfall is super powerful because up that level, the loan turns are just more attractive for all. So it'll be less of, you know, a big shock to the consumer when they're going from a first look with 10% all the way down to a subprime with the 20 to 30%. Totally shock them. So that's where this waterfall is super powerful. And what we're seeing today is approval rates up to 94%, which is great. Yeah, super amazing. So now you're probably asking, how does that work? So we'll go through how the waterfall works because it is a new concept for our service titan integration. And this waterfall will sit behind all of our first look providers. And basically it will seamlessly transition that first look decline through the Terns waterfall. And the way the Turns waterfall is set up kind of in four levels, starting at your backup prime for those customers I just mentioned that just barely got declined for the first look, all the way down to no credit options. And the great thing about this waterfall is kind of three things. One, of course, increased approval rates like we were talking about the 94%. But two, most likely better offers which will help with your conversion rates. So better loan terms, higher loan amounts, all that stuff. And then three, cheaper for the contractor. I hear all the time, no, we don't offer subprime because it costs a lot of. Well, with this waterfall, the max you're going to pay is subprime. And generally when we look at the average, it's around 6.7% APR or merchant fees, which is not too far off first look.
