Loanpal has ascended the solar financing ranks the last few years, and it looks to keep momentum going during this COVID-19 slowdown. Loanpal is partnering with more than a dozen solar equipment distributors in the U.S. to open up access to financing for hundreds of solar companies that might not typically be eligible to be on the Loanpal platform.
The aim of this Direct Pay Distribution program is to open installer’s credit lines and help mitigate risk of financial issues and decrease cash flow issues that are hitting the newest and smallest solar installation companies the hardest during the pandemic.
“While this is a product that has been in the works, it became a company priority when we realized the effect that the pandemic would have on the industry and small businesses,” a company spokesperson noted.
Distributors will have confidence that they will be paid for the equipment going out to solar installers because Loanpal will directly pay distributors for the enrolled solar installers’ equipment purchase or-ders. Solar installers can use more credit capacity for other expenses of their business as distributors typically take up much of a solar installer’s credit capacity.
This distributor program will also allow more installers the opportunity to contribute to the GivePower Give Partner program, which helps to provide clean drinking water to people in developing regions of the world. For each Loanpal loan sold, Loanpal contributes $20 to GivePower. $20 = clean water for one person for 20 years.
How Direct Pay works
Traditionally, newer and small solar installers either have had to pay cash or obtain a credit line for the purchase of the solar equipment. This tied up needed resources to grow as they are not paid by the homeowner until the system is installed.
By joining Loanpal’s Direct Pay program, installers can now obtain the necessary equipment for their jobs by providing their solar equipment distributor with the Loanpal approval/ executed loan agreement. At install complete, which is when Loanpal funds the homeowners loan, Loanpal will then pay the distributor their money for the product and send the remaining loan proceeds to the solar installer.
What are the benefits of Direct Pay?
• Solar installers can grow their business without having to raise capital or borrow more money from credit lines and other debt instruments.
• Newer and smaller solar installers can now access Loanpal’s competitive loan programs which have historically only been available to more establish solar installers with stronger balance sheets and business history.
• Solar product distributors can grow their business by shipping more product to solar installers without taking on the credit risk.
What loan programs are available through Direct Pay?
Loanpal’s Direct Pay Program offers loan terms up to 20 years, credit scores down to 650 and loan amounts to $100,000. Battery storage, solar ready upgrades and some home efficiency/smart home products also financeable.
Do any other solar lending companies offer a similar program?
Yes they do. However, other programs in the marketplace require the solar installer to purchase their equipment through one or two distributors. Loanpal’s Direct Pay will allow solar installers to work with any Loanpal approved distributor.
How do installers get involved?
Solar installers will be able to sign-up for Direct Pay on Loanpal’s website or through their Loanpal ap-proved solar product distributor.
Which distributors is Loanpal launching with?
Loanpal’s early Q2 launch includes:
- Eco Distributing,
- Fortune Energy,
- Next Energy Alliance,
- Rexel/ Gexpro,
- Next Solar Alliance,
- Crawford Electric,
- Crescent Electric and
- WESCO, with more partnerships to come.
— Solar Builder magazine