Paying for materials.

Discussion in 'Business Operations' started by Green Acres, Mar 21, 2006.

  1. Green Acres

    Green Acres LawnSite Senior Member
    Posts: 316

    I was wondering how you guys pay for materials? I do some projects for contractors and they usually take 30 days or more to pay. I was thinking of trying to get a line of credit from my bank. Has anyone else ever done this? Any options would be greatly appreciated. Thanks
     
  2. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    The easist way and what we do is just have Net 30 accounts set up with your suppliers directly. We don't do it for the same reason you stated as we do it so that can send any employee to get what we need and not have to worry about getting them a check. But also this way there is no interest charged (unlike the bank) and it gives you the 30 days you say you need.
     
  3. Green Acres

    Green Acres LawnSite Senior Member
    Posts: 316

    the problem is some places don't want to give me an account till I have a little more experiance. I just started doing this full time about 6 months ago.
     
  4. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Then a bank surely won't either since your business isn't yet financially established. Most all banks will require two years worth of tax records and a detailed business plan for a loan or line of credit. Based on that and that your suppliers won't give you lines then try getting a basic credit card in your personal name (and used only for business) as that will be much easier and would work as nearly every place takes cc's.
     
  5. Green Acres

    Green Acres LawnSite Senior Member
    Posts: 316

    I did get a credit card in the business name but hate to use credit cards. I think I will work on the suppliers some more. I have been doing this for 6 yrs part time and have tax returns for the banks. I just recently started to do it full time. Thanks for all the info so far.
     
  6. drsogr

    drsogr LawnSite Bronze Member
    Posts: 1,275

    I pay cash whenever possible. It makes everything easier.
     
  7. sheshovel

    sheshovel LawnSite Fanatic
    Posts: 5,112

    Green Acres..you need to start requesting your material $$ up front from the contractors..this is normal procedure.Then when you buy materials buy them and pay for them at the same places every time then they get to know you and then you can ask for an account later.You can't blame them because of the fly by nights they have given credit to them they finish the work..get pd for it..then drop out of site leaving the supplier holding the bag.6 months is not a very long time to be in biz.You need to get your material $$ from your customer to do business right now..you should not have to reach into your own pocket to cover.
     
  8. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,309

    Can't image any supplier not allowing you to set up an account?? That will delay payment some and then use the credit card that allows 30 days same as cash. Good luck with getting people to pay before you do the work, hard enough to get them to pay when work is finished.
     
  9. cklands

    cklands LawnSite Senior Member
    from MA
    Posts: 360

    You could go the credit card route. The other option is maybe you could take a little cash from a job and pay a supplier in advance for your materials. Give the guy say $1000 and maybe after doing that a couple of times he would see that you are serious and trust worthy. Just a thought.
     
  10. Lux Lawn

    Lux Lawn LawnSite Silver Member
    Posts: 2,267

    I have several Business Only credit cards,I charge my purchase on them and pay them off at the end off the month.Over the winter I opened a line of credit at my bank that I may start to use this season if needed.
     

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