0% Financing for Contractors: The Real Math Behind Same-as-Cash

Short answer first. A 0% financing offer is not free. Somebody pays for the homeowner's interest-free year, and it is you, through a merchant fee that climbs with every month of promo. Wisetack is one of the few lenders that publishes the numbers: 3.9 percent on a standard plan, 6.9 percent if the homeowner picks 12 months at 0%, and 9.9 percent for 24 months. On a $20,000 job with $6,000 of gross profit, that 24-month offer costs you $1,980, a third of your profit. Offer 0% when the job math holds, lean on short promos, charge cash and financed customers the same price, and know whether a plan is true 0% or deferred interest before you ever say "same as cash" at a kitchen table.

Here is the math, using each lender's own published terms as of early October 2026.

Somebody Pays for 0%. It Is You.

A lender's money is not free. When the homeowner pays no interest, the lender collects its return up front instead, by taking a fee out of what it pays you. Industry people call it a dealer fee, a merchant fee, or a discount. Same thing. It comes off your check.

The longer the interest-free period, the bigger the fee, because the lender is carrying the loan for longer without interest. Wisetack lays its fees out in a table on its own site, which is rare in this business.

The fee follows the plan the customer picks, not the plan you turned on. Wisetack's help center says "you only pay the higher fee when a customer qualifies for and selects that option. Otherwise, you pay the standard 3.9% fee."

Most of the other big names do not publish a number at all. GreenSky's merchant FAQ says "you pay a small fee each time you run a transaction" and sends you to its sales department for the rest. Synchrony and Service Finance both describe promotional plans on their sites without posting merchant fees. Foundation Finance advertises standard programs with no dealer fees for good-credit customers, and describes "risk discounts" based on the customer's credit that are taken at funding. Hearth takes a different route entirely: a subscription with $0 per-loan dealer fees, where the 0% option comes from 0% intro APR credit card offers with terms of 6 to 18 months. Hearth's own pages quote subscription ranges anywhere from about $1,500 to $6,000 a year, so get the current number from a rep.

The bottom line on fees: if a lender will not put its rate sheet in writing, you cannot do this math, and you should not offer its 0% plans until you can.

The Fee Comes Out of Your Profit, Not Your Price

Here is where most contractors fool themselves. A 6.9 percent fee sounds like a little haircut on a $20,000 job. It is not a haircut on the job. It is a haircut on the profit.

If your gross margin is 30 percent, your gross profit on that $20,000 job is $6,000. The $1,380 fee for a 12-month 0% plan is 23 percent of it. Here is the same math across the margins most residential contractors run.

The formula is simple: divide the fee by your gross margin. A 9.9 percent fee on a 25 percent margin job hands four out of every ten profit dollars to the lender.

That does not make 0% a bad deal. It makes it a real cost, the same as a lead, a commission, or a discount. The question is what it buys you.

How Many Extra Jobs Does 0% Have to Win?

The test for any 0% offer is whether it closes enough jobs you would otherwise have lost to pay for itself.

Say you sell $20,000 jobs at a $6,000 gross profit, and you finance 20 of them a year. If every one of those homeowners picks 12 months at 0%, you pay $1,380 a job, or $27,600 a year in fees. Divide by $6,000 and the 0% offer has to win you about five jobs a year that you would not have closed otherwise, just to break even.

But that is not the real comparison. You do not have to choose between 0% and nothing. You can offer the standard interest-bearing plan, where the homeowner pays interest and your fee stays at 3.9 percent. Against that, the 12-month 0% plan costs you an extra 3 points, $600 a job, or $12,000 a year across those 20 jobs. That is two extra jobs. Ask yourself honestly whether "0% for a year" closes two jobs a year that a plain monthly payment on the standard plan would not.

There is a second hidden cost: the homeowner who had the cash. A smart customer who was going to pay cash will happily take 12 months at 0% and leave the money in savings. That is good sense on their part. On your side it is $1,380 you paid to close a job that was already closed. You will never see that line on a report, but it is real.

The only way to know your number is to track it. For 90 days, write down every financed quote, which plan the customer picked, whether they closed, and whether they mentioned having the cash. Then do the division.

True 0% Versus Deferred Interest

"Zero percent" gets used for two very different products, and your reputation rides on knowing which one you are selling.

True 0% APR. No interest builds up during the promo period. If the homeowner still owes money when the promo ends, interest starts from that point on the remaining balance. Wisetack describes its 0% add-on plans as true 0% with no deferred interest or hidden fees, and Foundation Finance describes its Equal Payments plan as one where "no interest accrues for the entire contract term."

Deferred interest. Usually advertised as "no interest if paid in full" or "same as cash." Interest builds up quietly the whole time. Pay it all off before the promo ends and the interest goes away. Miss by a dollar and it all comes due. GreenSky's own deferred interest disclosure says that if the balance is not repaid before the end of the promotional period, the customer is "responsible for paying all interest that was billed during the promotional period," and GreenSky's own blog says plainly that "deferred interest loans are not the same as a 0% APR promotion." The CFPB says the same thing: the customer "would owe all of the interest back to the original date of the charge."

Here is what that looks like with numbers. Take a $20,000 job on a 12-month deferred interest plan, and say the plan's standard rate were 25 percent APR. The homeowner pays it down steadily and still owes $3,000 at month 12. Run the numbers on those assumptions and the back interest comes to about $3,000, billed on top of the $3,000 they still owe.

Guess who that homeowner is calling. Not the lender. The contractor who sat at their table and said "zero percent."

None of this means deferred interest plans are evil. Plenty of homeowners use them right. It means you say exactly what the plan is, in the lender's words, and never round it off to "0%" in a sales pitch or an ad.

Can You Just Build the Fee Into the Price?

Every contractor thinks of this. There are two ways to do it, and one of them can get you in trouble.

One price for everybody. You price every job to cover your average financing cost, and cash and financed customers pay the same number. If about 30 percent of your revenue gets financed at an average fee of 6.9 percent, your blended cost is roughly 2 percent of total revenue. Build that into your pricing the way every store builds in card fees. Under the Truth in Lending rules, Regulation Z, the official commentary says charges a lender imposes on a seller for providing credit "are excluded from the finance charge even if they are passed on to the buyer, for example, in the form of a higher sales price." That is the clean path.

A higher price only for customers who finance. This is where it gets risky. The same commentary says that "if the charge in a credit transaction exceeds the charge imposed in a comparable cash transaction, only the difference is a finance charge," and its own example is a $9,000 cash price versus a $10,000 financed price, where "the $1,000 difference is a finance charge." If the difference between your cash price and your financed price is a finance charge, then "0% APR" is not 0% at all. The rules do not line up neatly when a third-party lender is involved, so this is a question for a lawyer, not a blog. We are not lawyers, and nothing here is legal advice.

There is also the direction things are moving. In 2024, the CFPB put out a report on solar loans that said lenders "frequently bake these fees (commonly referred to within the industry as 'dealer fees') into the loan principal," and that the hidden fees "typically range from between 10 to 30 percent of the cash price." Its consumer advisory told homeowners to "ask the salesperson what the cash price" is. Home improvement is not solar, but that is the same question your customers are learning to ask.

Our call: one price, cash or financed. If a 0% plan does not pencil at that one price, offer the standard plan instead.

A 0% Policy That Protects Your Margin

Put this on one page and hand it to everyone who sells for you.

1. Lead with a monthly payment on the standard plan. Find out whether the monthly payment alone does the closing before you pay for 0%. On Wisetack it costs 3.9 percent instead of 6.9 or 9.9.
2. Turn on short 0% promos only if your margin can carry them. A sane rule of thumb: if the fee eats more than a quarter of your gross profit, skip that plan. At a 30 percent margin, that rules out 24 months and puts 12 months close to the line.
3. Know that you cannot pick and choose. Wisetack's help center says its 0% plans "can not be adjusted for specific customers or job sizes," citing the Equal Credit Opportunity Act. Once a 0% option is on, it is on for every customer who qualifies.
4. Charge one price. Same number for cash and financed customers.
5. Use the lender's exact words. "0% APR for 12 months" and "no interest if paid in full in 12 months" are different products. Say the one you are actually selling.
6. Track it for 90 days. Close rate on financed quotes, which plans customers picked, and how many 0% picks came from people who had the cash.

If you are still picking a lender, our Wisetack vs Hearth vs GreenSky comparison breaks down the three fee models, and the contractor financing guide covers how to present payments on an estimate. Remodelers can also start with our roundup of financing for remodelers.

The Bottom Line

Zero percent is a sales tool with a price tag, and the price tag is on your side of the table. Know the fee before you offer it, know whether it is true 0% or deferred interest, keep one price for everybody, and let your own close-rate numbers decide whether the longer promos earn their keep. Financing is worth offering on nearly every estimate. Free financing is a decision you make job by job, with a calculator.