Originally Posted by hackitdown
I guess a line of credit to buy materials is ok, but we now understand the risks. There is a simpler solution.
On large projects, I usually ask for a 33% deposit when work commences to cover my material costs. Most customers expect to pay it. Those who won't pay set off an alarm in my head. Sometimes another 33% is due halfway through. The final 33% is due on completion.
Thats the way it should be.
Ive noticed a trend change lately. It has a lot to do with the lowballer discussions we have here.
There are a lot more guys out there competing for the same work. Every one willing to chop their price to get it.
Owners know this. To them, its easier to wait until the job is done, then pay for it. They dont want to worry about deposits and if the contractor pulls it off. They want zero risk.
Years ago, if they wanted to deal with a reputable contractor. Most all contractors had the same payment terms, and the customer accepted that.
But that changed. The owners say "take it or leave it" and some contractors leave it, others take it.
This isnt all customers or all situations. Many paid me on my terms without a hesitation.