Michigan Saves loans allow energy efficiency contractors to turn cost concerns into conversation-starters. Amanda Godward and her staff at Ecointelligent Homes are prepared to find leaks and help homes and businesses save energy and money.

Cost is the major concern when considering construction projects. It affects whether a client decides to go ahead with their plans, how far they go, and often, who gets the job.

Michigan Saves loans allow energy efficiency contractors to turn cost concerns into conversation-starters by providing a tool to make bigger projects affordable. In fact, they’re a great way for contractors to get more clients and better-paying jobs without spending a whole lot of time and effort.

Michigan Saves is a nonprofit organization committed to improving energy efficiency in the state’s homes, businesses, and public buildings. The organization began its work in 2009 through a grant from the Michigan Public Service Commission (MPSC). Since that time, it’s become its own autonomous organization run by a 15-member board with assistance from a MPSC-appointed policy advisor.

To further its green energy mission, Michigan Saves offers budget-friendly loans to consumers through contractors who specialize in energy-saving and renewable-energy jobs like HVAC projects, energy consulting, electrical work, and solar panel installation.

“We are a nonprofit that tries to make it easy and affordable for Michigan businesses and homeowners,” says Michigan Saves Executive Director Mary Templeton. “Other programs offer low initial rates and balloon interest rates after the introductory period, but all of our interest rates are fixed. They’re really low, attractive rates, and they don’t change for the life of the loan—which is really beneficial for the consumer.”

Going with Michigan Saves financing is easy and accessible because eligibility requirements are not stringent, and no inspection or appraisal is required. Getting a loan approved doesn’t require a lot of frustrating paper work either. Clients just need to make a simple 15-minute phone call, which can take place during a contractor visit. They can usually get a decision on their request within minutes.

About 400 Michigan contractors now offer Michigan Saves’ financing to their clients. Joining them is a virtually hassle-free process that involves a quick online application, proof of insurance and a brief training session via webinar that takes an hour or less depending on the topic.

The loans themselves are split into several categories that cater to different consumers. They include a Home Energy Loan Program as well as Public Sector, Business, and Multifamily Energy financing plans. The terms vary depending on the type of loan.
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Since its launch in 2009, the nonprofit has loaned out more than $30 million to Michigan homeowners. An additional $4 million in financing has been put into business-related projects after it began servicing commercial clients 18 months ago.

On average, a homeowner with Michigan Saves financing saves about $350 a month on their energy bills. Taking the nonprofit’s 4,000 residential clients into account, that’s a savings of well over $1 million a year for the owners of Michigan residences.

Homeowners Laura and Steve McMullen didn’t have the cash on hand to get new windows for their home, so they took advantage of a Michigan Saves’ home loan and are very pleased with the results.

“It was a really good deal,” Steve McMullen says,”a very low-interest loan for a project we wanted to do. And we love our new windows—they’re a big improvement over what we had before.”

The financing programs carry lots of benefits for those doing the work, too. Although many contractors like the simplicity of working with cash-only clients, Templeton says offering customers Michigan Saves loans can really give business owners an edge.

“We’re offering financing to expand our contractors’ pool of potential customers,” she says. “So while it’s great to have customers that can afford some large, up-front payment, contractors can serve a broader market when they offer financing.”

“This is especially true for the Business Energy Finance program where we know small businesses can struggle to get needed capital from banks,” she continues. “Lately, we’ve been averaging an 85 percent approval rating for our business customers, and that’s a real accomplishment both for us and those businesses.”

A recent, in-house survey found that 80 percent of Michigan Saves’ contractors said its financing helped them close a deal. What’s more, a study of 2,600 upgrades involving Better Buildings for Michigan projects found that financed jobs were two-and-a-half times larger than cash-only ones, and those clients who financed implemented more improvements and saved more energy.

Amanda Godward owns Ecotelligent Homes, a southeast Michigan-based eco-consulting company. She’s been using Michigan Saves financing since 2011 and says the service has increased her firm’s close rate and average sales.

“When I first started Ecotelligent Homes in 2009, we didn’t offer financing,” she says. “I surveyed my past customers who elected not to move forward with improvements, and over 25 percent said they likely would have installed the improvements if we offered financing. That was enough for me to try out Michigan Saves.”

“At Ecotelligent Homes, we only install energy efficiency improvements based on the findings of our energy audits,” she adds, “so the Michigan Saves program was a great fit for us.”

Kalamazoo contractor Brad Bartholomew has been using Michigan Saves financing since from the organization’s beginning. He owns two businesses, a HVAC company that installs high-end energy-efficient equipment and an auditing firm called Energy Saving Services, and uses the loans for about 50 projects a year between them.

Michigan Saves’ financing has been “absolutely critical” to his work, he says, noting that he’s used it to get jobs he otherwise wouldn’t be able to secure.

The programs are designed to be simple and require little reporting. Whether a contractor is working in the residential or commercial market, Michigan Saves tries to keep any overhead to a minimum.

Managing the administration for the loan online is quite simple too, according to Bartholomew, because it requires no more paperwork than a typical building job. He also calls the customer service at Michigan Saves “wonderful,” and “very responsive [to his inquiries],” regardless of whether they’re questions about issues he’s having or simply ideas he has about his customers’ financing.

“It’s just awesome to have a conversation with them because usually the [other] finance companies are multinational conglomerates where there’s no person that you can talk to,” he says. “Here we’ve got Mary or Julie or Todd or whoever. Somebody’s there that can give us an answer. I highly recommend it.”