Financing for the Win with Constant Energy Capital

Good morning, everybody. It's Jim Johnson here, the head coach at Contractor Coach Pro. And welcome to another edition of the Contractors Training Room. And we're going to be talking about financing for the win today. We have a couple special guests with us. John Geary and Paul Jamison from Constant Energy Capital. They're waving at you there. Paul Jamison is the chief strategy officer. And then we have John, who is the vice president of sales strategy. Is that correct, John? Have that correct the right.

Yeah. Vice president of strategic accounts, Vice president.

So everything has to do with strategy.

Which is we talk about kind of the face of the company, I guess.

Yeah, we're all about strategy. Everybody asks us what we do all the time. We actually coach and teach business strategy, so that aligns very well. It's all about strategy. And we like to help contractors play chess, not checkers. And so that's why we brought you guys on today. We want to help them with their understanding of what finance is and what financing for our customers is. And one of the things I realized early on is that I was scared of financing, so maybe we can get over some of that fear. But before we do that, let's get to know you guys a little bit better. Paul, tell us a little bit about yourself and why you're involved in this financing thing and what you're doing with CASA Energy Capital.

Sure. So my role here at the company, I oversee coming up with our products. It really is, in part listening to John and his conversations with all the contractors that we support about how we can best help them better deliver value to their customers. We came to this business. I personally spent a lot of my career in the energy space, financing power plants, a lot of rooftop solar projects, actually. And so I come from the other side of the table. My job back then was to make sure we had the funding to complete the projects before they were done. So we are a group of folks that come from the energy space and the banking world, and we really built this business to support the contractors first. So our entire platform is meant to be. We saw this as an opportunity to support the contractors and build financing around them and their needs. So that's what I do here at the company. And on my weekends, I like to hike golf, and occasionally I'll grill, but right now it's a little cold up here, but normally summertime barbecue. Wonderful.

Awesome. So, Paul, you know, the guys who were on a little bit earlier got to hear this, but who's your favorite golfer?

So I have to do my different vintages when I Fell in love with golf. Freddy Couples, my favorite golfer, and now personal favorite, Rory McIlroy. So those are just two. You know, Jim, you and I were chatting, but they're just both Americana golfers, the guys you want to root for.

And kind of that Just good guys, right? Is that the reason why? Yeah. Cool. And so now we've got John over there, and I got to hang out with John for an evening. It was great. And we had something we had never had before. And don't think bad of us, because it's not what you think it is whenever I say it. But we have this thing called a weird whiskey cake, Right, like this whiskey. What did you think of the whiskey cake?

That was unbelievable. Blew my hair back. It was a treat I've never had before. It was delicious.

So tell us a little bit about what you do there and what your role is with CASA Energy.

Yeah, you bet. So, as I mentioned, I'm VP of Strategic Accounts. What that means is, you know, I'm out there on the road.

Meeting with.

Contractors, dealers, manufacturers, and, you know, listening to their stories and trying to help them, you know, increase overall sales and project size. You know, as head of sales, you know, I've had a great opportunity to, you know, talk to a lot of these different contractors. And what really drew me into Constant Energy itself is I come from a background of financial services. And when this opportunity presented itself to me, most of the experience I have had with finance in my personal world, it's not an industry that really intrigued me. But when I heard the story about Constant Energy Capital, I was like, geez, you know what? I can take my background and do something with it that is actually a positive for the group that I'm going to be talking to. And that is a, you know, a truly responsible lending platform that can help people grow their businesses. And these are businesses, you know, they're real people, right? These aren't corporate, you know, Fortune 500 companies that are, you know, these are people with families and lives and, you know, they're trying to. Trying to do good. So it was a great fit for me.

Awesome. Cool. We do have quite a few people on it Looks like everybody's here. We got 27 attendees. So welcome aboard, everybody, to this contractors training room addition for financing for the wind. Now, how long has Constant Energy Capital been around?

So we founded the company in 2015.

So, wow, just four years. So what makes you go, hey, I want to step into this financing world, especially when there's all these other finance companies that are out there. And these choices for contractors, you go, hey, this is a great idea. Let's go start our own financing company.

Thank you, Jim. So we saw an opportunity to fill a void. People had options. We just thought that frankly we could build a better mousetrap. The incentives could be better aligned between a lending partner, a contractor and their customer versus what was out there today. And that's from the products that were being offered to the process that everyone had to go through and ultimately just the experience that they have in this and the relationship between those three parties. So we saw that frankly a lot of the financing was taken from other places and put in the laps of contractors to figure out. And we wanted to start that, rip it apart and say, let's put the contractor first and let's build a product around them.

Okay, cool. So why should a contractor even consider financing in the first place? You know, I would. I was a contractor for many years and did it in both venues, both insurance, restoration and retail. And I just kind of expected those homeowners, like if they're planning on getting a new roof or some new siding or gutters or whatever, like you should have the money to do that. So why would somebody even consider financing in the first place?

I think you can start by just looking at the statistics, the statistics that are out there. You know, what we've seen in our experience is an increase of at least 20% in project size across our contractors and an increase of overall annual sales of 40%. So just looking at the basic numbers, numbers don't lie. And I think that would be the number one reason. Elaborate.

Yeah. Another, especially for the roofing contractor industry in particular, there's plenty of information out there. A recent study from the Joint center for Housing Studies at Harvard showed that projects, the larger they go, the more are financed and in fact the majority, more than half are financed of projects that are in that average re roof project size. So if you're not financing today, that tells you that there's probably a large segment that you just aren't being able to serve. Because those folks, more than half of them, are opting to finance projects in that 20,000 plus ticket size range.

Yeah, I think that's been kind of the big difference. You know, in the last, I don't know, five to 10 years or so, the project price for your just normal average everyday 30 square roofing project has almost doubled. It's gone from everybody kind of thinking, hey, 10,000, maybe 12,000 bucks for the average roof out there to this 18, 20, $25,000 RA and not everybody just has that kind of money sitting around. And even if they do, if they get their finance rates lower than what their investment return is, if they're playing the stock market or doing some of those types of things, you can. That's the reason I bought a house. I bought a house because the finance rates were so low. I could have probably just paid for it, but it really came down to, hey, if I can get that low of an interest rate and keep that money and go and invest it over here and earn a higher interest rate, I'm making money. And so I can see why more and more of that is becoming more prevalent as we move forward. So what keeps contractors from offering financing to their clients?

Yeah, I would say that probably the number one reason is fear. And it's a fear of not knowing. Not knowing the answers around financing in general. Fear of denials. I mean, look, I wouldn't want to be the contractor sitting in the kitchen, across the kitchen table from someone that gets a denial than having to be the credit counselor, right? And I think there are definitely ways around. Basically not having the need to understand everything. Financing, right. Finding the right financing partner that can help you and kind of lift that burden off of you and allow you to offer financing without having to get in the weeds with your customers.

And a lot of also the, you know, if it ain't broke, don't fix it model. So I have a business. It's working for me. Everyone that I sell to pays cash. And so if you go, great. But are you closing every single deal that you offer? Because if the answer is yes, I would say sounds like you have a winning solution and you should go out and find more customers and you'll probably find some that would be interested in seeing payment options. So it'd be good to offer. And two, if you're not, think about that time you walked in to go buy a car. You didn't have to ask for payment options. They were just given to you. That's just the way cars are bought today. And Jim, to your point, average roof cost now is on par with the car. So it really, maybe it hasn't been that way for the longest time. People weren't expecting to be, as a contractor, as a roofing contractor, I'm not expecting to have to also be someone's financial solution provider. But now that these ticket sizes are so high, that's becoming almost a demand or a request of these customers. And it can be the difference between someone going with you versus your peer, with everything else being Equal. But there's a payment option from this other party.

I'm sorry, I was just going to say people can be funny about their personal finances, too. You can imagine a contractor going into someone's home and saying, hey, look, we have these great payment options available. And people say, well, what is it about me that makes you think I need financing? Offering them financing, they may be reluctant to kind of, you know, open up their personal, you know, lives to someone they don't know. And, you know, maybe they just don't want to admit that they would prefer financing, but they don't want to, you know, throw it out there. So by not having financing, you know, it's definitely a detriment at that point of sale.

You can imagine somebody at the point of sale, I'm sitting across table from you, and you're offering me products. And me asking you, well, do you offer financing? It could be an uncomfortable question to ask as a customer. I feel strange. So you offering it, what's the harm?

I kind of see a few different things there as you guys are talking. One of the things we teach as salespeople is whenever you ask a question, especially a closing question, like, you're ready to get this person as your customer, you want to give them two choices. And the two choices are neither. One of them are, no, it's just, which way do you want to go? Do you want to pay with a check or would you prefer to finance this? And so you have some options available for them to choose from. The other thing is, you know, homeowners are in this situation not wanting to ask. So if you have. Nobody wants to say, hey, can you finance this? Because that. It comes with this thought process that I'm not financially sound enough to pay you cash for this. But when you ask a question like, would you prefer to pay by check or would you prefer to finance this? That opens it up at that point say, you know what? I kind of prefer to finance this if I can, because it's only this much per month. We'll get into some of those questions here in just a second. So that's kind of some of the fear. And, you know, some of my fear was just understanding, like, the finance itself, like, what kind of options do I offer? You know, do I offer same as cash. Do I offer five year? Do I offer a six year? What do you have to offer? What are our best practices? And so getting those things answered, it was just like, man, that seems like too much. I don't want to mess with that. And it's going to be too complicated for my salespeople. So I don't want to mess with that. And really it's just taking a little bit of time and it doesn't take very long whenever we got involved in it to get it figured out, to kind of figure out these, you know, usually we save about three options. You know, keep them pretty simple. Something same as cash, something a little bit more long term, you know, a five year and then a third option depending upon whoever your finance partner is. Whatever they may choose for you to offer makes it very simple. Which way do you want to go? You monthly payments sound a lot better than $20,000. And so those things come into play and you get taught by whoever your financing partner is of how to go about presenting this in a way that makes sense to that customer. Oh, it's pretty funny. When you said about the car thing, nobody asked you if you're going to pay cash for it. So what do you want your monthly payments to be? That's the question. I'm the opposite. I'm like, tell me how much of this cash and then we'll figure that part out later. It's pretty funny. So what does it take to get qualified with a financing partner to offer financing as a contractor? What are some of the things that they need to have in order to make sure that they can offer financing in the first place?

Sure. A key part of that is that you have demonstrated history of being in business of delivering the customers and that you don't have. Your reputation is solid. This goes back to actually some of the fear points of brand risk. So you've now built up a strong brand. Introducing somebody else into that mix is a risk. The same thing here for your financing partner. They want to make sure they're partnering with contractors that have a good reputation and good standing in the industry, and also that they're serving those customers, delivering on time.

Yeah. And the other thing I would mention in terms of different financing partners that are out there, you know, I do realize there are folks that actually will do a credit check on a contractor as well as underlying customers when they apply for a loan. So that's something you want to think about too when choosing a financing partner.

Okay, so how about for you guys, are there specific criteria for constant energy? I know you don't really want to talk about yourselves too much. We're here to provide value. But that'll give these contractors some kind of idea of what that might look like. There is there amount of time in business. But are business bureau Ratings, any of that kind of stuff that get taken into consideration.

Certainly we like to see two years in business and if you're not at that level, it's one of the things certain every company is different, but it just means you may go into a manual review process, but two years in business and just consistent volume because that's a good way for us to see that if you've been operating for a while and you've been able to sustain that level of employees, that that means you have a business that's actually going to survive and we're not running the risk of funding projects that may not get completed. So explaining in that regard what. Why is a financing partner asking you those questions about your business? They want to know that they're delivering funds to you and that you're someone that's going to complete the job for their customer because they're on the hook if you don't finish the job to help make that customer whole. That's a part of consumer law that we have to look out for. And that's why these financing partners might seem kind of heavy handed in that diligence review. So that's our first and foremost. And then looking out for your reputation, the space and that you there aren't any complaints against you or say filings at the state level. So we'll just make sure that in your market you are in good standing and then go from there.

All right, cool. Awesome. So that's a little bit of credit. Not real hard. It doesn't seem like couple years in business you service your clients, you're paying your bills and that kind of stuff, probably going to be a pretty good chance of being able to offer financing. Because it's really the thing that clicked for me. It wasn't really about me as the contractor in the big scheme of things was really about that homeowner and their credit risk is what it comes down to. So that's kind of one of those fear things that we should probably get over and not be too concerned with is most of us can't offer financing. It's really more about the customer. Okay, cool. What are the top three questions a contractor should consider when choosing a finance partner?

You know, it's funny, I think one of the questions that I think contractors should be asking, but I don't think they are or not enough. You know, everyone's always talking, what's your lowest rate that I can offer my customers? And the question they should really be asking is what's your highest rate? Because this goes back to what we were talking about earlier, Jim, with predatory practices, or are you offering the right programs to your customers? When you talk about the lowest rate, there's a very finite number of customers that are going to be able to qualify for that rate. And these are folks in the very top tier credit rating and debt to income ratio. So the majority of your customers are going to have a much higher interest rate. And what is that highest interest rate that any financing company offers? They can be up in the 30s, 30%, you know, we're talking back in the 80s types of interest rates. So understanding what the highest rate is, when you talk about putting your customer in a program that might not be suitable for them, you know, that's a really important piece of knowledge to have have. A lot of financing companies are extremely reluctant to offer that information up. And I would implore your listeners to ask that question because it will really give you a good look under the hood on what's really happening.

And that goes also to not just that introductory rate, but the post promotional rate. Because we all see those products that have teasers and it might be 0% for however many months, but after that, what happens? And plenty of lenders offer those promotional products. We have them as well. But not all promotional products are created equal. So it's worth asking about those details of the back end. So another, the other questions they should ask are in order to see those firm offers for a customer to see what they can qualify for, is it a soft credit pull or a hard credit pull? So difference between those two, a hard credit poll is just that you're going to get a mark on your credit report and ultimately just by checking your score and checking what you qualify for, your score goes down. And it's worth asking because in some cases many folks will say it's a soft pull. But that's just to get a preliminary idea of what you qualify for. And once you get to see the real offers, it's a hard credit pull. So be mindful of that because there are lenders out there, ourselves included, that have a soft pull all the way through that process of seeing your actual offers and signing a loan.

And so we as like consumers, that soft pull, we hear of that as is an inquiry, right? Like an inquiry on our credit. And like, is this going to be an inquiry on my credit? A lot of people ask that whenever they're going to get financed because they may have something else going on. They may be, you know, trying to buy a new house or anything like that and maybe thinking about one in the future. And all those things affect our credit. So I just want to make a note here for everybody that's listening, ask questions. You guys, as you, as we're talking and we're conversing here, this is, this is a two way street. Not there's not between these guys, it's between us and y'. All. So if you have questions about anything to do with finances, we go through this. You came to this with some questions, get them in here and I'll make sure that we get them answered either at the appropriate time or right then and there if it pertains to that question. So that sounds like some of the things that we should be asking our finance partners. I know one of the big ones, like I always see all the time is like, what credit score do you finance down to? Right. Cause it's all about me in that particular situation as a contractor, can I sell somebody or not? And what do you guys think about that? Is that one of the questions that somebody should ask or is it really something they shouldn't worry too much about?

It's a good question to ask, but it's within the context of what John mentioned earlier of what are the products you're going to offer these people. So example, one of the things, a lot of folks have these products called deferred interest promotions. And it sounds really great because what you'll be able to do is go in there and say, look, you can sign up with me today, I'll put your roof up, and as long as you pay off this $20,000 loan in full in the next several months, it'll just cost you $20,000. But if you miss that payment by a single day, you will see charges. As John mentioned, some of those rates are as high as the 30s in terms of percentage points. It could be an extra thousands of dollars that you charged your customer that the lender did, so they had to pay extra for that job. And it went all to the lender that you probably paid fees to offer this promotional product for. So we here at Constant Energy Capital have promotional products where people make payments from day one. But that promotional period truly is zero percent. If you miss that promo window by a day, guess what? When it rolls forward, you have the same monthly payment post promotional period, and there's no deferred interest. Basically clawback, where they go back in time and yank that 0% away from you and replace it with 30%. So those could look the same. If I showed you those on a piece of paper, we'd Say, hey, zero percent for this month and then another rate, zero percent for this, another rate. They almost look the same. And so I liken this to something we chatted about earlier about how it's just some of this is just like the products you're installing on the roof. You just need to make sure you're getting into those questions about what is the product I'm offering and putting here and how will it take care of people in the long run? How will this hold up in a hailstorm? How is it going to hold up when this event happens in the neighborhood? It's the same thing for financing. What happens if they lose their job or they can't make that balloon payment? We look at it that way. And so that approach of responsible lending, especially for roofing contractors, you're putting a roof over somebody's head. You want to make sure they're safe, and you want to do the same thing in terms of the payment options you're offering them to finance that project.

So here's. I want to get some clarification. I want to make sure that not only do I understand this, but everybody listening understands this. So you offer an 18 month, same as cash. Somebody else does too. At the end of theirs, they don't get it all paid off. They still have, let's say, $5,000 to pay off. It balloons up to 30%. Is it 30% on that $5,000 or is it 30% on the whole 18,000 that they're now paying? And so that changes, right? The second that day hits, it changes. And then with you guys, that day hits. They can, Jill, just keep making the same payment or is there an interest rate on top of it now of whatever's left? Can you clarify that a little bit of what exactly that looks like?

Certainly. So we have products that no matter what, you miss a payment, we may, you know, example, late fees may be incurred, but we actually set those up because we just want to incentivize a customer to then get back on track. It's not meant to be something where we make money. We're just trying to say, hey, if you pay, get back on track and we'll waive that fee. But what you signed up for in your loan product are the rates are the payments. There's no conditional. If you don't do this by this date, then we're going to retroactively change things. So with our product, say that 18 months, in that example, go by. When month 19 rolls around, you'll have the same monthly payment. It's not going to spike and suddenly possibly put stress on your customer's budget. And some of Those products, the 18 months, it's even trickier because it might be no payments. And think about the person who. Out of sight, out of mind. If I'm not seeing that on my monthly statement, boy, I can't tell you how many folks I know that have said, oh, I did one of those once on a. On a mattress or on something else. And boy, it ended up costing me 20 extra percent because I forgot. So we have. Yeah, we set people up to make monthly payments, but those first payments, you're just paying yourself back. It's all 0% money. You're putting it back in your bank account. It's just putting you on a. But, you know, you're budgeting for yourself. It's really being responsible with this financing.

That's super cool because. Yeah, out of sight, out of mind, right? And a lot of people I know, I'm that way, especially when it comes to things that have to do with money. So. Okay, that was really interesting. That is a unique difference between you guys and some of the others that I've seen. There's actually a term for that other thing, and I'll say it so you guys don't have to. It's called predatory lending. And that's one of the reasons why I struggle with financing is predatory lending, because it's all about them seeing it. I think you guys kind of look at it like you kind of made your money on that money already. You, There was a fee associated to that contractor to provide that particular option. Like, hey, we got our money, but we still want to get our money from the homeowner too. And we will just. We made our profit there. Is that a fair assessment?

It is. The challenge being some of those products, when you set someone up not to pay you for a while, and then there's this big penalty if they fail to meet that deadline, it actually signals to a lender, oh, gosh, this might be trouble. And so that's why they charge those high rates. We just don't build products that rely on someone taking $20,000 and finding a way to pay it off in one big balloon, or else they're going to have this giant charge, you know, so it really comes down to. I wouldn't. It's more about making sure your customers are safe in the products that they're signing up for. And it's the same as you're evaluating these products. You might look at two different manufacturers and their materials they have different attributes, they have different cost structures, installation procedures. But ultimately it comes down to what you decide is best for your customer. And what are you selling on? What's the value proposition that you're trying to deliver? Is it a safe roof? Is it a cheap roof? What are you going for? And the same thing applies to the financing.

Yeah, my value proposition is the baddest ass roof in the entire neighborhood. That's the one I'm selling. So that's kind of the way we look at it is. Let's talk about that a little bit. We had a question this morning. I put out that we were going to be doing this on my Facebook page. And a guy asked a question, he goes, these insurance restoration contractors, how does it work? How does financing apply to them? And I have some of my own opinions. One of the things I do want to talk about is we are here in Texas, we have what's called House Bill 2102, which is this new bill that really just reinforces an old law saying, hey, you got to pay your deductible and state of Texas deductibles significantly different than they might be in other states. But I see that coming. This is coming for other states. The average deductible in Texas is about $4,200 right now. I think you guys can probably back that up. That that's what we're seeing with deductibles as high as 8, 10. I think the highest one that I've seen has been $27,000 deductible. And so those are pretty significant. Now, obviously that's on a big project, but here in Texas, you now have to pay that. You have to show proof of payment of that. And so how do you guys help with that type of thing? And how should finance companies help with that type of thing?

Yeah, so in terms of deductibles, you know, we've obviously had a lot of interest from roofing companies looking to finance deductibles as a standalone finance or a standalone loan. And we're happy to do that. And in fact, we're happy to, when that deductible is financed, provide automatic notification to insurance companies with proof of payment for that deductible as a value add. So that's taken out of the customer and the contractor's hands. You know, I think more intriguing than funding the deductible is being able to fund the whole project. And we can get into that in terms of how you upsell a project, you know, going from maybe an Owens, Corning, Oak Ridge or Supreme to a Berkshire. Right. And increasing your overall project cost. But you know, as it relates to HB2102, I think funding, you know, financing the deductibles and funding the contractor directly. This is really important. I've talked to a lot of contractors and they all talk about how time consuming it is to be chasing customers and contractors for the second RCV payment or these insurance payments. It's tedious follow up that you shouldn't have to deal with. So we've come up with a program that we pay the contractor directly when that customer signs the loan documents. We fund that contractor 50% right up front. So then get started with the project. Give their customer peace of mind that they're getting their roof fixed or new roof over the head to keep the rain out and that contractor can go buy their materials. We notify the insurance companies with proof of payment and at the end of the project we fund them the second 50%. They don't have to deal with the insurance companies, they don't have to chase anybody for payments. It's payment insurance for the contractors.

That's right. And I see building on that, I see a question in the chat related to this. And so the idea that hey, someone's looking to finance $1,000 or $2,000 deductible versus a larger project loan, say this is a $10,000 job. It's a great thing to ask your financing partner. So us for example, if you were to be offering our financing to customers, we will for the maximum that they qualify for and it allows them to choose. So in the event someone thinks they only need 3,000, if they have the opportunity to upsize that, we will let them know. But if they asked for 10 and they end up only qualifying for 7, we'll also let them know that too. So they then have the freedom and the flexibility to choose. You know what, okay, thank you. Maybe I will take the 7,000 and I have $3,000 to to pay the difference for example. But going back to HB 2102, a great and just generally insurance folks is that financing the deductible is one thing, but imagine if I know we HB2102 went to changing how deductibles were handled. This is a new paradigm now. But imagine if instead of someone just financing their deductible, they opt to finance the entire project. During this insurance claim a few things happen. Number one, you will have certainty of payment for that project when it's completed. Regardless of the status of the insurance claim process, because that lender is going to fund the project. So that takes that off the table for you. It also takes it off the table for the customer. Because if that insurance claim process is going on longer than expected, what do you do? Now you're doing this work and you're kind of juggling this whole process here. And number two, imagine that instead. Now if they finance that whole job, that insurance claim check that comes back, it's up to them. If they want to use that to pay the loan down, put it into rainy day funds. You are now possibly helping them have some savings in their pocket, emergency funds or other projects they need to fix. Because we're here to finance that roof project. The insurance company is going to make them whole, but we can still finance that roof project and those proceeds can be something they can use for other opportunities.

You couldn't have said it any better. That's literally what we teach is to sell a high value roof. You know, remember that badass roof I was talking about earlier? You've got this 30 year or three tab roof on your house. Your insurance company is going to give you a certain amount for it. For another five, $10,000 you can put on this amazing roof. Not only the product, but the system itself. And the way that we do it, that is not comparable to any of our competition. It does cost more you can finance. The whole thing will help you get more money from your insurance company because they missed a bunch of things on your scope. But it's not going to be this much. But it's going to be a great down payment towards this. You could actually use the money whenever it comes in to pay off the loan if you want to. Or shoot, you know, pay off a high interest loan, buy a car that you would normally have to pay really high interest on. Shoot, go to Aruba, do whatever you want to do. That's up to you with your finances. I kind of like the rainy day fund. That was actually pretty smart. Maybe invest it. Even if you could can earn more interest off of it than you could on what you're financing. But there's so many different options. So Mario asks, what's the dealer cost per transaction on a same as cash program? So do we have that answer available today or is that something that they should contact you? Cause we're not here to sell constant energy. Their number is going to be different than other finances. If you're willing to share it, go ahead. We'll just answer it real quick. But if you'd rather just get ahold of you and have that conversation. That would be fine too.

Sure. Well, we have several. Again with the not all promos are created equal and even the same with ours, we have multiple flavors of same as cash programs because those have different benefits for different contractors. What they're trying to solve for it comes down to what is the monthly payment you're looking. Maybe your customers have a lower monthly payment need. If it's this short, guess what, those payments are going to be this high. And the longer out you make that same as cash program, you're effectively look at that dealer fee more as a. You're paying the interest on the behalf of your customer. That's you. You are saying, look, I'm going to build this roof for you and this is going to be a subsidized loan. So this is a 0% financing or some low rate. But that's a conversation that you'll want to have with that financing partner. But it certainly varies in the same way that the roof products vary, even though it might be the same shingle type.

Yeah. If I understand things correctly, the shorter the time and the bigger the payments, the less the dealer fee and the longer the time and the smaller the payments, the higher the dealer fee. So it's going to vary depending upon the amount of time that you're doing the same as cash. Is that correct?

That is, yeah.

And just to give an example, I mean we have 6, 12, 18 and 24 month term, same as cash programs available. So they, you know, they kind of span from short to long like you said.

And even some that are flexible where there's a same as cash as we talked about before, same same as cash, period. But as opposed to what I like to call exploding deadline of you've got to pay it off by this moment you have a flexible deadline. And even those a great example of when to use that. All the roofing contractors out there who are listening, you ever talking to somebody that might be selling a house? This is a perfect opportunity to offer them a product like that where it's same as cash for a period and then they have extra time just in case, say they need more time to spend sell their house. But this is a way to help them not have to come out of pocket too much and still maximize their home sale, for example. So.

Let me ask a question. This kind of leads me to something. So let's say we did the 24 month thing or this, the one that Paul's been talking about. This length of time, same as cash right and that seems to be fairly.

We call that that product we call level that's our level product so it.

Goes past that date does that affect okay so it goes past that date so now it's a little bit longer bit of time the payments don't change for the customer does that affect my dealer fee at all?

It does slightly because the payment they're making during that promo period is smaller so it goes to your it's not as much as if you gave them this long of a promo sorry John it's not as much as if you gave them all of this promotional but you've allowed them to have an affordable monthly payment from day one even during this same as cash period so it has a slight increase to that fee as opposed to it might be a say 10 year loan with a 2 year promotional period that is going to be far less than a four year promotional period but the monthly payments will be lower Gotcha.