The Early Days. Our original job was to get homeowners and businesses to use energy!

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2 The Early Days EGIA was officially formed by the merger of the Northern California Electrical Bureau and the Gas Appliance Society of California. EGIA s roots date back to the early 1930 s Our original job was to get homeowners and businesses to use energy!

3 Todays Presentation Will Cover 1. Why is Financing so important to growing my business? 2. The Application Process 3. Options & Rate Sheet Overview 4. How To Enroll In The Program

4 Why is Financing so important to growing my business? 4

5 The Financing Cycle A Proven Strategy to Grow Sales & Profitability Offer payment options when presenting the job estimate to every customer, every day Payment options win more bids & grow your average job size and give you the margin needed to grow your business Include payment options or same as cash loans in print & online materials to drive leads Many successful contractors use payment options to increase sales

6 Financing Statistics Even the folks with cash out there don t want to part with it all up front!

7 Consumer challenges = Demand for Financing Limited Cash Resources Over 60% of U.S. HHS live paycheck to paycheck Big Ticket Hesitations Over 50% of U.S. consumers find it difficult to spend $2k on a major purchase, pay for repairs wall street journal

8 American Family Financial Statistics Data 1. Average American family savings account balance $3, Percent of working Americans who are not saving for retirement 40 % 3. Percent of American families who have no savings at all 25 %

9 Impact of Offering Financing On Contractor Businesses Cash With Financing Options Leads Sold 3 5 Avg Ticket $16,700 $21,570 (30%larger with financing) Revenue MTD $50,100 $107,850 Revenue YTD $601,200 $1,294,200 *Based on an average of EGIA member contractor experiences and industry information. Actual results may vary.

10 Impact of Offering Financing Grows Quickly With Added Salespeople! Assumes 10 active salespeople at a similar level of performance Cash With Financing Options Leads Sold Avg Ticket $16,700 $21,570 (30%larger with financing) Revenue MTD $501,000 $1,078,500 Revenue YTD $6,012,000 $12,942,000 *Based on an average of EGIA member contractor experiences and industry information. Actual results may vary.

11 Top Salesman Statistics Across EGIA Platform 1. Sell between 70-75% of their jobs with financing. 2. Have a 25-30% higher closing ratio. 3. Have 15-20% larger projects. 4. Sell higher efficiency products.

12 Different Types of Customers in the Marketplace Cash Buyers - Those that have the cash and are hesitant to write that big check. (offer Same as Cash) Payment Buyers - That need the lowest monthly payment to pull the trigger. (offer Longer Term payment plans) Challenged Credit - In this tough economy you cannot forget the 40% of the applications that can t be approved by A paper lenders. Most importantly, financing helps the homeowner overcome cash separation anxiety!

13 13 Best Practices For Offering Financing

14 1. Be Methodical. Every Customer Every Time! me thod i cal məˈthädikəl/adjective adjective: methodical 1. done according to a systematic or established form of procedure. "a methodical approach to the evaluation of computer systems" synonyms: orderly, (well-)ordered, (well- )organized, (well-)planned, efficient, businesslike, systematic, structured, logical, analytic, disciplined; More Let The Customer Know it is Available! When You Set The Appointment Before You Do The System Check Before They See The Bid Cost Never prejudge your customer Every customer, every time

15 2. Offer A Low Payment Or No Payments at All For Up to 12 Months

16 Promotions drive purchasing behavior Having a varied promotional mix helps you increase the average sale. $6,804 *GE Capital Retail Bank 2011 statistics for home improvement industry

17 3. Get Over Contractor Fees! Contractor A Cash Or Credit Card $15,000 quoted price $450 monthly payment (assumes 3% min payment on credit card) Contractor B $16,200 quoted price (includes the cost of 6.99% APR, 120 months $188 monthly payment Financing Fees Are In Everything You Buy From Cars to Furniture to Big Screen TV s. Or 12 Months Same As Cash Or a cash discount today of $15,000

18 Anybody buy a car, furniture, spa, or a big screen TV lately? 18

19 4. Ask Preliminary Questions

20 5. Before They See The Bid Price They Should See A Payment Option A great way to show net monthly payment after energy savings.

21 6. Have A Clear Plan For Your Sales Staff About Financing No Interest / No Payment Options Plan Code# Payment Factor Term 6 Months #AXW234 0% 120 mos. (after promo period) 12 Months #AXW546 0% 120 mos. (after promo period) 4.99% #4995YRW % 60 mos. 6.99% #6997YRW % 84 mos. 6.99% #69912YRW % 144 mos.

22 7. Become An Expert To Close More Deals There Is No Silver Bullet In Financing Use Multiple Options: Same as Cash / No Payment Long Term, Fixed Payment Reduced APR Equal Payment / No Interest Credit Challenged That s Why The WaterFurnace Program Has Multiple Options For You!

23 8. Advertise Financing To Attract Customers and Manage The Overall Perception Of Affordability Find Local Competition Using It And Get Off The Ball And Offer Financing! Financing Is Used by Your Competition!

24 9. Up Sell Using Payment Option 1 Good Total: $7,000 Basic change out Monthly: $210 Avg. 3% credit card payment Option 2 Better Total: $10,500 Base Energy Star Model Monthly: $208 Example after energy bill savings: 6.99% For 60 Months Option 3 Best Total: $20,000 Geothermal Installation Monthly: $204 Example after energy bill savings: 6.99% for 144 Months Added Bonus 30% tax credit: $6,000 Hypothetical Example

25 # 10 Use Financing To Close Say something like this We can install your chosen system it this week for as little as $ / month. And we have 2 great ways you can pay for it 1. Is a fixed rate installment loan at 6.99% for 144 months with no prepayment penalties. 2. Or if you just want some time to pull your money together, we can install it now and you can have 12 months with no payments and no interest and we can get you approved in just a few minutes and you won t have to share your financial information with me, just the lender. Which choice do you like?

26 26 Reading The Rate Sheet

27 EnerBank Rate Sheet Unsecured Installment loans to $45,000 Down To 640 FICO Score Terms From 5-12 years Fixed APR options starting at 0%-12.90% No interest No payment loans for 6 / 12 / 18 months No interest equal payments options for months No pre-payment penalties Paperless application process

28 Using The Payment Multiplier Your Job Cost: $18,500 including labor, materials, etc. Plan 69912YRW46 First add in the dealer fee so you do not hurt margin 1. $18,500 x 9.15% = $ $18,500 = $20,192 (Price you quote to customer) Second calculate the monthly payment using the payment factor off the rate sheet 1. $20,192 x 1.02% Payment Factor = $ monthly payment

29 Application Process- The Simplest In The Marketplace 29

30 Totally Paperless APPROVAL 1. Hello I m contractor # My customer is applying for plan #AXW The contract amount is $20, Hand the phone to the customer 5. Once approved the customer and the dealer are notified 6. or fax your signed contract/work order to the bank. Bank will or mail Payment Authorization Form to homeowner. 7. You are done with the approval, NO paperwork! 50/50 Staged Funding is available. 50% up front, and 50% at job completion FUNDING For funding simply have the homeowner follow the link online to the Payment Authorization Form. Once signed you will receive payment in hours.

31 Developing Your Companies Financing Offering 31

32 Plan For Success Get Trained On The Process Pick The Plans That Best Suit You & Your Team Build in Any Contractor Fees Role Play With Your Team Until They Are Comfortable Close More Sales at a Greater Margin!

33 33 How Do I Get Enrolled?

34 Enrollment Is Easy Just Visit:

35 Marketing Financing Options For Consumer Facing Tools:

36 Contact Information For General Information or to enroll in the financing program please call : Let my team know you are a WaterFurnace dealer For Detailed Questions or Enrollment: JEREMY CHANDLER Director, Contractor Services (916) jchandler@egia.org