Dealer Fees in Contractor Financing: What They Are and How to Manage Them
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Expertly reviewed by: Kaaviya Sivakumar
⚡ Dealer Fees — What You Need to Know
- ✓ Dealer fees are the cost contractors pay to offer promotional financing (0% APR, low-APR programs)
- ✓ Typical range: 2–8% of the financed amount, depending on the program term and rate offered
- ✓ Longer promotional periods and lower consumer APRs = higher dealer fees
- ✓ Many contractors pass through or absorb these fees strategically to close larger jobs
- ✓ Flat-rate financing platforms charge per-proposal (not per-financed-dollar) — a meaningfully different model
Dealer fees are a real cost of offering competitive financing — but they’re a manageable cost when you understand the math and choose the right platform for your volume. The contractors who use financing as a competitive advantage are the ones who’ve done this calculation and priced accordingly, rather than discovering the fee impact after the fact on a job P&L review.
Sources & Further Reading
Written by RemodelFin Editorial Team
RemodelFin's editorial team is comprised of former project managers, estimators, and business owners who have collectively managed over $50M in residential remodeling volume across the US.
Contractor Q&A
What is a dealer fee in contractor financing?
A dealer fee (also called a merchant discount or program fee) is the percentage of the financed amount that a financing platform charges the contractor when a customer uses a promotional financing offer. For example, if a customer finances a $25,000 kitchen remodel on a 12-month 0% APR program with a 6% dealer fee, the contractor receives $23,500 — not $25,000. The $1,500 is the dealer fee.
How much are typical dealer fees for contractor financing?
Dealer fees typically range from 2–8% of the financed amount. The size depends on the promotional offer: a standard 12-month 0% APR program runs 4–6% dealer fees on most platforms. An 18-month 0% program may run 7–9%. High-APR consumer loans (18–29% APR) typically carry lower or no dealer fees. Programs like Hearth, GreenSky, and similar platforms use this model.
Can contractors pass dealer fees to customers?
It depends on the financing platform's terms. Many platforms explicitly prohibit surcharging — adding the dealer fee as a separate line item on the invoice. Some allow price differences between cash and financed projects (two-price model). Always review your financing platform agreement before implementing any fee passthrough strategy. A safer approach: price all jobs to absorb dealer fees at your anticipated financing take rate.
What is the difference between dealer-fee financing and flat-rate financing?
Dealer-fee financing (Hearth, GreenSky, etc.) charges a percentage of each financed amount — typically 2–8%. Flat-rate financing platforms (like RemodelFin) charge a fixed monthly or annual subscription fee and do not charge per-financed-dollar. For high-volume or large-ticket contractors, flat-rate models can cost significantly less than percentage-based dealer fees.
Do dealer fees affect my cash flow?
Yes. With dealer-fee programs, you receive the financed amount minus the dealer fee — typically within 1–3 business days of loan approval. If you quoted $30,000 and the customer finances on a 6% dealer fee program, you receive $28,200. This affects the cash flow analysis of the job and should be factored into pricing if financing adoption is predictable.
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