Invoicing & Payment
Offering customer financing
By DoneQuote Editorial · August 24, 2026 · 5 min read
On this page · 8 sections
Third-party customer financing lets a homeowner repay a lender over time. Your payment follows the lender’s dealer agreement and may be reduced by a fee. Compare that net amount, the funding conditions and any risk you retain before offering a program.
What lender financing changes
There are three parties and the flow is short.
The customer applies through the lender’s process. The lender decides eligibility, amount and terms; do not promise an approval or a decision time.
If approved, the customer signs a loan agreement with the lender. Not with you. You are the merchant on the transaction — often called the dealer — and your role is to confirm the work.
The dealer agreement sets when the lender funds you and what proof of completion or customer authorization it requires. Ask about deposits, staged funding and settlement time before enrolling if you buy equipment up front.
The customer then pays the lender monthly for the life of the loan. Read the dealer agreement for any recourse, funding holdback, chargeback, or dispute provisions before treating a funded job as fully final.
The dealer fee comes out of your funding
A lender may fund the job minus a percentage, called a dealer fee, dealer discount or merchant fee.
Compare the written dealer fee for each program. Promotional terms can have different fees. These invented percentages show the deduction on an $18,500 job; they are not market rates or lender offers:
| Illustrative fee | Fee percentage | Withheld on $18,500 | You net |
|---|---|---|---|
| Example A | 3% | ~$555 at 3% | ~$17,945 |
| Example B | 6% | ~$1,110 at 6% | ~$17,390 |
| Example C | 9% | ~$1,665 at 9% | ~$16,835 |
That fee is a cost of sale and belongs in your pricing, the same way card processing does — but read your dealer agreement before you decide how. Check whether your agreement bars charging a financed customer more than a cash customer for identical work. Where that clause exists, the fee either sits in your price for everyone or comes out of the margin on that job.
What the customer sees
A monthly payment spreads the purchase over time. Compare it with the total repaid. These fictional examples assume an $18,500 loan, equal monthly payments, a fixed interest rate and no additional fees:
| Structure | Monthly payment | Total the customer pays |
|---|---|---|
| 0% for 18 months | ~$1,028 | $18,500 |
| 12.99% over 60 months | ~$421 | ~$25,250 |
| 9.99% over 120 months | ~$244 | ~$29,325 |
These are arithmetic examples, not financing offers. Longer terms can reduce a payment while increasing total interest; affordability depends on the customer’s finances. A true 0% loan is different from deferred interest, which can add interest if the promotional balance is not paid as required. Use the lender’s actual disclosures.
Approval is never guaranteed. Present financing as an option and keep the full price clear even when showing a monthly amount.
Lender-financed versus carrying it yourself
Both let the customer pay over time. They are completely different businesses for you.
| Third-party lender | Payment plan you carry | |
|---|---|---|
| When funds arrive | Under the lender’s funding conditions, less fees | As the customer pays each installment |
| Customer default risk | Depends on recourse in the dealer agreement | You |
| Your direct cost | The quoted dealer fee and other charges | Your own cash tied up |
| Practical ceiling | Whatever they approve | What you can afford to float |
| Collections work | Usually the lender; disputes can still involve you | Yours |
Choose based on the cash you can afford to carry and the risk you retain under each agreement, rather than a universal job-size cutoff.
Getting set up as a dealer
Ask the lender for its merchant enrollment checklist. It may request business and tax identification, license and insurance evidence, bank details and financial information. Check for a personal guarantee, reserves or funding holdbacks before signing.
Read the recourse language before you sign. A lender may reserve rights where a customer disputes the work, and the FTC Holder Rule preserves consumer claims and defenses in covered financed sales. Financing does not insulate you from a job done badly. It may reduce your exposure to a customer who cannot pay for one done well.
Check advertising, fair-lending and licensing rules
Referring a customer to a lender can still create obligations for your business. Review the following before offering financing.
Advertising. Regulation Z advertising rules can require additional disclosures when you state payment amounts or other triggering terms. State rules may also apply. Use lender-approved language and have it reviewed rather than inventing a monthly-payment claim.
Fair lending. Use a consistent process for presenting financing. Regulation B prohibits discrimination and discouraging credit applicants on a prohibited basis, such as race or national origin. Let the lender assess creditworthiness.
State licensing. Some states license or register businesses that arrange consumer credit, and some have home-improvement rules about financed contracts, cancellation periods and door-to-door sales. Confirm your own obligation with your state licensing board or an attorney before you start selling financed work.
Add approved lender information to the quote
If you offer financing, add the lender’s approved wording and required disclosures to the quote letter or payment terms in DoneQuote. Review the job price and financing information before sending. The customer’s quote approval records the proposed work; the lender separately approves the loan and supplies the payment calculation.
Check the fee, funding conditions and remaining risk
Before offering financing, know what each program costs, when it pays you, and which disputes or defaults can lead to repayment demands. Use approved lender wording and disclosures for any payment example.
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