Credit Line

I've been a roofer since I was a teenager and the past 4 years started selling and learning the business side of the trade. I currently received my license as a general contractor and I'm slowly trying to spread my wings and get out on my own. Problem is I applied for a credit line at 2 supply houses but was denied. Is it because I'm a new business??? What should I do??? We all know shingles aren't cheap, and I don't want to result in having to ask homeowners for money up front. Is ther a simple way on receiving a credit line? Thanks for your input.

It's called covering your AZZ.

All you guys...It sounds good and it is, however, I like Ronald Reagans words; "Trust, but verify" Thesre are not our daddy's times we are working in. A lot has changed. Get a down-payment!

I would never, ever give a "down payment" for any work to be performed on any of my properties....I may lend a helping hand to a guy just starting out, by paying his supplier for materials or the like.

As I stated previosly, only due to a decline in working capital did I begin requiring a material deposit/payment, (just in the last 3 yrs,,....been in biz since 83')....There's also the fact the majority of our work is on second-homes/out-of-state owners, who it seems, by nature. have become difficult to work with. It's a shame, but a necessary evil.

I was talking with an old retired rancher....We were both musing at what the heck has become of us,....he recalls selling bulls to guys over the phone and shipping them out; Receiving check for $10,000 or so in a few weeks. I've done deals much the same w/second home owners; They call...I give them price....They say do it...I do it...They send payment when done....

I started 50% down at signing of the contract about 10 years ago and would never do anything else.......if its over $1000.00. anything uder is payable at completion. I have never lost a job because of it and I have never been stiffed since I started doing it.

I don't need the hassles. I have never had a customer not pay a downpayment and if they did, I would just move on to the next customer.

Image is everything. If you want to be viewed and treated as not so reliable or unstable then " joint check is the approach. Think about it,,,,,,, Joint check rule is a principle that when an owner or general contractor issues a check that is made jointly payable to a subcontractor and the subcontractor's materialman, the materialman's endorsement on the check certifies that that it has been paid all amounts due to it, up to the amount of the check. This rule protects the owner or general contractor from lien foreclosure by a material man who was not paid by the subcontractor. The use of joint checks is well established by custom and practice in the construction industry.

When a subcontractor and his materialman are joint payees, and no agreement exists with the owner or general contractor as to allocation of proceeds, the materialman by endorsing the check will be deemed to have received the money due him. The material man may protect himself by simply refusing to endorse the check until assured by escrow of other arrangement that he will recover his rightful share of the check. Because the materialman is positioned to demand immediate payment in exchange for his endorsement, the custom and use of joint checks is beneficial to materialmen. The joint check rule is likewise beneficial to owner and general contractor. They have contracted with the subcontractor, not the materialman and are usually unaware of the nature and size of the materialman's claim against the subcontractor. The joint check rule provides a simple yet expeditious method for owner and general contractor to pay their debts to the person with whom they have contracted while eliminating the risk the subcontractor will not pay the person with whom he has contracted. [Post Bros. Constr. Co. v. Yoder, 569 P.2d 133, 135 (Cal. 1977)]

R sales, it's easy. Assuming your supplier is willing to bet on the homeowner as well as you. Ask your supplier if they will do "joint pay". The owner makes check to you and the supplier. The supplier takes the check, cuts you a check for what ever is left after the material bill. It's done all the time with small start up guys. However, they will notify the owner to make checks joint pay and that does make you look like you are shakey (and you are), but it beats no credit at all.

OS We are all brillant. And dumb dumb too. :blush:

Hey, I used to get a signed contract and supply the materials and the labor and get paid when it was done. Been there and done all of that. Not too smart in retrospect. I thought I was brilliant back then. I had the money to back it up too. Very dumb! Very dumb.

The basic idea... only because having a working knowledge of how the world operates is essential to understanding critical areas of owning and operating a business such as down payments along with other information.

B) :) :) B) Deep Down In Florida Where The Sun Shines Damn Near Every Day

Ciak I'm not quite sure what you are saying. I'm going to take a stab at this. Sometimes families are in need, we are not idiots, adjustments can be made but you have to sense the situation and make sure your not the one getting screwed. PC Too many cheaters out there.

Here is the problem as I see it. The land of the free and home of the brave is in danger of becoming — not to put too fine a point on it — the land of the dunderhead, my trip of the last couple of months drove that point home for me. It's no secret that as a people, we're rapidly losing the basic fund of knowledge we need if we're going to function well in a complex business world.

B) :) :) Deep Down In Florida Where The Sun Shines Damn Near Every Day

Jet...we did the same thing ....all stated in the estimate, no quarrell to be made PC

What Jet says. I tell them how it is and then EXPECT it. that is not begging or sweating. That is business!

We take a token deposit of 10%. We don't deposit the check until the job starts. Then we bill about ten (10) days after the job is complete. I tell customers, "My work usally last longer then it taes people to pay me". I find the harder you try, or want something, the harder is to obtain. Customers sence deporation. TRY NOT SWEATing.

We have our payment terms printed right on the estimate form and ask for a third down, balance due day of completion. In that way you don't have to actually "ask" for anything. Just point to the line where it says "Our Terms".

JET