Contractor Financing for Customers: 2026 Costs

TL;DR

Contractor financing for customers lets a homeowner pay for a job in monthly installments while a third-party lender pays the contractor in full. The contractor does not lend anything, but it does pay for the program in one of three ways: a per-job merchant fee (about 3.9% on standard plans), a dealer fee on promotional 0% APR plans (roughly 10% to 18.5% on older published rate sheets), or a flat yearly subscription with no per-loan fee. On an $88,000 kitchen remodel, that spread is the difference between about $2,300 and more than $11,000. Card payments on the same job cost about $2,550, and a bank transfer can cost as little as $25.

What contractor financing actually is

When a contractor "offers financing," it signs a merchant or dealer agreement with a lender. The homeowner applies, usually from a link in the estimate or invoice, gets an instant decision, and picks a term. Once the homeowner confirms the job is done, the lender sends the money to the contractor's bank account and collects the monthly payments from the homeowner from then on.

Three things follow from that structure:

• The contractor carries no repayment risk on a normal loan. If the homeowner stops paying, that is the lender's problem.
• The contractor does carry dispute risk. Under the FTC Holder Rule (16 CFR Part 433), when a seller refers a customer to a lender, the homeowner can raise complaints about the work against the lender. Most dealer agreements pass that back to the contractor through a refund or clawback clause, so read it before signing.
• Someone pays for the 0% offer. When the homeowner pays no interest, the lender earns its margin from the contractor through a higher fee.

The three ways contractors pay for financing

1. Per-job merchant fee

The contractor pays a percentage of each financed job and nothing else. Wisetack, the lender built into Jobber, Housecall Pro and several other field-service apps, lists its merchant fee as 3.9% on interest-bearing options and up to 9.9% for a 24-month 0% APR plan. It finances home-services jobs up to $65,000, at 0% to 35.9% APR for the homeowner depending on credit, and says funds reach the business within 3 business days after the customer confirms.

2. Dealer fee on promotional plans

Bank-backed programs such as GreenSky, Synchrony and Service Finance offer "same as cash" or 0% APR promotions and charge the contractor a dealer fee that rises with the length of the promotion. Most do not publish current rates. The one public reference point is a September 2022 GreenSky rate sheet, cited by Hearth, which listed 0% to 2.75% on standard installment loans and 11.5% to 18.5% on true 0% plans. Ask any lender for its current sheet in writing.

3. Flat subscription

Hearth runs a lender marketplace and charges a yearly subscription instead of a per-loan fee. Its own pages put most contractors at $2,000 to $6,000 a year plus a $99 setup fee, with $0 per loan. The homeowner sees offers from several lenders and pays whatever rate the chosen lender sets.

Worked example: collecting $88,000 on a kitchen remodel

Take a mid-range kitchen remodel in Los Angeles. Renology's 2026 Los Angeles kitchen cost guide puts that kind of project at $66,000 to $110,000, with a median near $88,000. Assume a California payment schedule: a $1,000 down payment and four progress payments of $21,750, so five payments in total. Where financing is used, the homeowner finances $60,000 and pays the rest from savings.

Card and ACH prices are from Stripe and Square as published on October 31, 2026. On a job this size, the per-payment cap on ACH is what makes it nearly free, which is why many remodelers push bank transfers for progress payments and keep cards for small jobs.

Per-job fee or subscription: the break-even

A flat subscription beats a 3.9% per-job fee once the yearly financed volume passes the subscription price divided by 0.039:

• $2,000 a year breaks even at about $51,300 financed per year
• $3,000 a year breaks even at about $76,900
• $6,000 a year breaks even at about $153,800

One financed kitchen like the example above covers most of a low-tier subscription on its own. A handyman or repair business that finances a few $5,000 jobs a year will pay less on a per-job plan. Remember that the subscription only removes the contractor's fee: the homeowner's rate still comes from whichever lender approves them.

California: the $1,000 deposit cap changes the math

California limits the down payment on a home improvement contract to $1,000 or 10% of the contract price, whichever is less, and bars collecting payment for work not yet done or materials not yet delivered. The Contractors State License Board restated both rules in a 2022 industry bulletin, and a violation of Business and Professions Code section 7159.5 is a misdemeanor.

On an $88,000 job that means the contractor buys cabinets and materials with its own money and gets paid as phases finish. Financing does not change that rule, and most point-of-sale lenders fit inside it anyway, because they fund after the homeowner confirms the work. What financing changes is the size of the job the homeowner agrees to and how fast the final payment arrives. For the contract wording the state requires, including the down payment notice and the progress payment schedule, Renology's California home improvement contract checklist lists each clause with its code section.

Where contractor financing goes wrong

• Hiding the dealer fee in the price. The CFPB found in an August 2024 report on solar loans that dealer fees often raised the loan cost 30% or more above the cash price, and were left out of the stated APR. Quoting one price for cash and a higher one for financing, without saying why, is exactly the pattern regulators look for.
• Offering the longest 0% plan by default. The 24-month 0% option can cost the contractor two and a half times the standard plan. Offer it when it closes a job, not on every estimate.
• Waiting on sign-off. If the lender funds only after the homeowner confirms completion, a punch-list argument delays the whole financed amount. Agree on what "done" means in writing.
• Ignoring the clawback clause. If the homeowner disputes the work, the lender can usually take the money back from the contractor. Know the window before you start.

Operator playbook

1. Price your average financed job. Multiply it by your expected financed jobs per year and compare 3.9% of that number with a subscription quote.
2. Get current merchant fees for every term in writing, including the 0% promotions, before you show any of them to a homeowner.
3. Put financing on the estimate itself, with a monthly payment example, so the homeowner sees it before deciding to cut scope.
4. Collect deposits and progress payments by ACH where the processor caps the fee, and keep cards for small jobs and final balances under a few thousand dollars.
5. Use one price for the job whether the homeowner pays cash or finances. If you must recover the financing fee, say so in writing.
6. Read the dealer agreement for recourse, clawback and funding-on-completion terms, and match them to your contract's completion definition.

If you are choosing the card processor as well, our ranking of payment processors for contractors compares effective rates at contractor volumes, and the Level 2 and Level 3 guide explains how commercial-card jobs can cost less to process.