The Customer Financing Audit: Why How a Company Sells HVAC Systems Matters as Much as How Many It Sells

The due diligence item that separates a $1.5M acquisition from a $2.2M acquisition — and it’s hiding in the sales process, not the financials.

You’re looking at two HVAC companies. Both do $2.4M in residential replacement revenue. Both have 10 trucks, solid reputations, and clean financials.

One closes 52% of replacement proposals at an average ticket of $14,800. The other closes 34% at $9,200.

The difference isn’t the technicians, the equipment brands, or the marketing spend. It’s the customer financing program — and you won’t find it anywhere in the quality of earnings report.

Customer Financing Isn’t a Perk Anymore — It’s Infrastructure

If you’re evaluating an HVAC company in 2026, here’s the baseline reality: over 70% of homeowners choose financing for HVAC replacements. System prices have nearly doubled since 2019 — what used to be a $6,000–$8,000 job now runs $12,000–$15,000 or higher with the 2026 tariff surcharges pushing equipment costs up another 15–30%.

At those price points, financing isn’t a nice-to-have. It’s the mechanism that determines whether a homeowner says yes today or calls two more companies hoping for a cheaper option.

Contractors who offer financing on every replacement opportunity see measurable results:

• 18–25% higher close rates compared to cash-only presentations
• 40–60% higher average tickets — customers finance the better system, not the cheapest option
• Faster decision cycles — same-day closes become the norm, not the exception

One case study tells the story clearly: Braga Brothers, a tri-state HVAC contractor, shifted from price-first selling to financing-first selling. Their average ticket jumped from $23,000 to $37,000 — a 62% increase — while achieving a 95% one-call close rate.

If the company you’re buying doesn’t offer financing, or offers it inconsistently, you’re looking at a business that’s leaving 20–40% of its potential revenue on the table. That’s not a problem — that’s an opportunity. But you need to know about it before you set the purchase price, not after.

What to Evaluate: The Five-Question Financing Audit

1. Which Provider(s) Does the Company Use?

Not all financing platforms are the same. The major players in HVAC:

• GreenSky (Goldman Sachs): Largest home improvement lender. Wide adoption, strong brand recognition. Dealer fees range from 0% to 26.6% depending on promotional terms. Primarily serves prime credit customers.
• Service Finance: Popular with HVAC contractors. Dealer fees from 1.25% to 24%. Strong in the residential replacement space.
• Wells Fargo: Traditional bank lending. Dealer fees 0–15.18%. Conservative underwriting — higher decline rates, but lower dealer fees on standard products.
• Optimus (EGIA): Brand-agnostic multi-lender platform. The key differentiator: covers prime, sub-prime, and credit-challenged borrowers through multiple lender partnerships. Available to any contractor regardless of OEM affiliation.
• OEM-captive programs: Carrier Credit, Trane financing, Lennox financing. Tied to specific equipment brands. Often competitive rates but limit equipment choice.

Why this matters for acquisition: a company using only an OEM-captive program is locked into one equipment brand for its financing. If you plan to diversify brands post-close — or if that OEM changes its financing terms — your sales infrastructure breaks.

A company on Optimus or a multi-provider setup has more flexibility and broader customer coverage.

2. What’s the Dealer Fee Structure?

Dealer fees are the cost the contractor pays the financing company to offer the loan to the customer. They come directly out of your margin.

The range is enormous:

• Standard-rate loans (customer pays interest): 0–4% dealer fee
• Same-as-cash promotions (12–18 months, 0% APR): 5–8% dealer fee
• Extended 0% APR (24–60 months): 8–12% dealer fee
• Reduced-rate long-term (84–120 months): 6–10% dealer fee

Here’s the math on a $14,000 replacement job:

A company offering aggressive 0% APR promotions on every deal is closing more jobs but giving up $840–$1,400 per transaction in dealer fees. That’s $84K–$140K on 100 replacement jobs per year — a material margin impact that doesn’t show up as a separate line item on the P&L.

Ask for the financing provider’s merchant statement. It shows funded volume, dealer fees paid, and approval rates. If the seller can’t produce it, that tells you something too.

3. What Percentage of Replacement Sales Are Financed?

This number reveals how deeply financing is integrated into the sales process:

• Under 30% funded: Financing is available but not consistently offered. Technicians are probably quoting cash prices first and mentioning financing only when the customer hesitates. Significant upside opportunity for a buyer who implements financing-first presentations.
• 30–50% funded: Financing is part of the process but not systematic. Some techs use it, some don’t. Training inconsistency.
• 50–70% funded: Strong financing integration. This company is presenting monthly payments alongside cash prices on most replacement opportunities.
• Over 70% funded: Financing-first culture. The company leads with monthly payments and uses financing as a core sales tool.

A target at 25% funded volume with a path to 60%+ represents significant post-close value creation. A target already at 70% is running an optimized sales process — which justifies a higher purchase price but leaves less room for improvement.

4. Does the Program Cover All Credit Tiers?

Here’s the gap most buyers miss: prime-only financing providers decline 30–40% of applicants. If your target’s only option is GreenSky or Wells Fargo, they’re turning away a third of the customers who want to buy.

Multi-tier financing fills this gap:

• Prime (700+ credit score): Best rates, lowest dealer fees. All major providers serve this tier.
• Near-prime (620–699): Higher rates, moderate dealer fees. Service Finance, FTL Finance, and Optimus cover this range.
• Sub-prime (550–619): Lease-to-own or second-look lending. Microf, Aqua Finance, and Optimus sub-prime partners cover this segment.
• Credit-challenged (under 550): Rental/lease options. Very few providers, but representing a customer segment that still needs HVAC and still has money.

A company with a multi-lender platform like Optimus can offer every customer who walks in the door a path to yes. A company with only prime lending loses the bottom third — and those lost customers don’t just go away. They call your competitor.

5. Does the Merchant Agreement Transfer at Closing?

This is the question nobody asks until it’s too late.

Most financing merchant agreements are contracts between the financing company and the business entity. When ownership changes:

• Asset sale: The existing merchant agreement typically terminates. You need to apply as a new merchant — which means a new application, new underwriting, and potentially different terms or dealer fees.
• Stock/entity sale: The agreement usually stays in place, but many contain change-of-control clauses that require lender approval.
• Timeline risk: New merchant applications take 2–6 weeks for approval. If your financing goes dark during the transition, your close rate drops immediately.

Build the financing transition into your closing timeline. Apply for new merchant accounts 30–60 days before close. If the seller’s terms are better than what you qualify for as a new applicant, factor that into your negotiation — those terms have real dollar value.

How Financing Quality Affects Valuation

Let’s put numbers on it.

Company A: No financing program. 34% close rate on replacements. Average ticket $9,200. Does 180 replacement proposals per year = 61 closed jobs = $561,200 replacement revenue.

Company B: Financing offered on every call, multi-tier coverage. 52% close rate. Average ticket $14,800. Same 180 proposals = 94 closed jobs = $1,391,200 replacement revenue.

Same number of leads. Same number of trucks rolling. $830,000 difference in replacement revenue.

At a 3x SDE multiple, that revenue difference — driven almost entirely by the financing program — represents hundreds of thousands in enterprise value. And it doesn’t require a single additional marketing dollar, truck, or technician.

If you’re buying Company A at Company A’s valuation, you’re getting the upside. If you’re buying Company B, you’re paying for an optimized sales process that justifies the premium.

Either way, you need to know which one you’re looking at. The HVAC acquisition math guide walks through how SDE multiples and deal structure reflect these revenue differences.

The Financing Due Diligence Checklist

Before you close, get answers to these:

1. Which financing provider(s) does the company use? Get the merchant agreement.
2. What’s the dealer fee schedule by product type? Get the most recent merchant statement.
3. What percentage of replacement sales were financed in the last 12 months?
4. What’s the average approval rate? What percentage of applicants are declined?
5. Does the company have sub-prime or second-look lending options?
6. Does the merchant agreement have a change-of-control clause?
7. What’s the timeline for new merchant application approval?
8. Is financing presented on every replacement opportunity, or only when the customer asks?
9. Are technicians trained on financing-first presentations, or do they lead with cash price?
10. What’s the funded volume trend over the last 3 years — growing, flat, or declining?

If the seller doesn’t track funded volume or can’t produce a merchant statement, you’ve just discovered that financing isn’t integrated into the business — which is either a risk (revenue below potential) or an opportunity (easy post-close improvement), depending on your perspective.

What to Do After You Close

If you inherit a weak financing program — or no program at all — the fix is straightforward:

1. Week 1–2: Apply for merchant accounts with 2–3 providers covering all credit tiers. EGIA’s Optimus platform is the fastest path to multi-tier coverage with a single application.
2. Week 3–4: Train every technician on financing-first presentations. The pitch is simple: “This system is $238 a month” beats “$14,280” every time.
3. Month 2: Implement point-of-sale financing tools — tablet-based applications that give the customer an answer in 60 seconds while the tech is still in the home.
4. Month 3: Track funded volume as a weekly KPI. If it’s not being measured, it’s not being managed.

Most contractors see the close rate impact within 30–60 days of consistent financing-first implementation. This is one of the fastest post-close value creation levers available to a new owner.

The Bottom Line

Every HVAC acquisition guide tells you to audit the P&L, check the fleet, and review the customer base. Nobody tells you to audit the financing program — and it might be the single largest driver of replacement revenue variance between otherwise similar companies.

The question isn’t whether the company has financing. It’s how well the financing program works, how much it costs, whether it covers all customers, and whether it survives the ownership transition.

Ask for the merchant statement. It tells a story the financial statements don’t.

Evaluating how an HVAC company structures its sales process? Start with the payment and close rate fundamentals, then work through the proposal close rate analysis to see how financing fits the bigger picture. For the financial framework behind acquisition valuation, the HVAC acquisition math guide walks through SDE multiples and deal structure.