materials financing for roofers with illustration and roofer photo

As a roofing contractor with over 30 years of experience, I’ve had my fair share of instances where invoices from suppliers were simply not paid on time — not because I don’t like paying my suppliers, but generally because of the time it takes to get paid. 

As the founder of Mr. Happy House, a roofing and siding company in the Houston area, I can tell you that material financing is one of the best tools to pay suppliers on time, get more jobs done, or even complete a project faster. 

Is contractor material financing right for roofing companies? 

As a roofer, you can’t get a project off the ground without materials — literally. On a typical roofing project, material costs make up anywhere from 30-50% of the total job expenses. Unless the owner provides a down payment that covers those costs in full, you either pay for materials out of pocket, open a line of trade credit with a supplier, or put it on a credit card.

But it can take months to get paid. In the meantime, your cash is tied up or you’re hitting your credit limit, both of which make it harder to take on new projects. Financing material purchases allows roofers to take on more or bigger projects — all while saving their cash for other expenses, and preserve their credit capacity with their suppliers.

Within the roofing and construction industry, there are instances where you find yourself at a standstill between work, time, and finances. Past-due invoices from suppliers, backlogged accounts payable, and brand-new projects demanding more equipment and maintenance can put a strain on your cash flow. 

No contractor or roofing company is blind to the fact that even though suppliers usually offer 30-day terms, it can sometimes take longer than that time frame to actually be paid on completed work. Contract financing options are available — like lines of credit — however, they can often be too restrictive for your own needs. 

This is most especially true if you’re working on a huge commercial roofing project. On the other hand, resorting to traditional lenders can be quite impractical as well, since they typically want some type of security — like placing liens on your business property in exchange for working together. 

However, one option that’s growing in popularity with many roofing contractors today is materials financing — which is much different than supplier financing

Contract material financing provides your business enough flexibility to keep your own projects on schedule, manage your cash flow gap, bid on better projects, and scale your roofing company even further. 

How material financing works for roofers

When you sign up with a company that offers materials financing, they get to know the kinds of projects you work on and some of your company’s basic financial information.

The financing company pays cash directly to your suppliers so you can get materials right when you need them. Over an extended period of time — with some offering terms up to 120 days — you finally repay the cost of your purchased materials to your material financing partner. 

Compared to paying in a lump sum upfront, this instead allows you to run your projects smoothly and more efficiently, all while enabling you to bid on other projects at the same time. With material financing, you get to enjoy a lot of benefits. 

First, it gives you higher credit limits. This makes it convenient for you to work on larger projects because they are funded and supplied according to your needs. You’ll also have faster funding, the fastest of which usually takes place on the same day. 

Also, it also gives you better supplier pricing. When you pay in cash, you take advantage of supplier cash discounts, which are good for your business finances. More than that, you also get to have lower monthly payments. 

The greatest benefit of contractor material financing may probably be the fact that not only do you find a better financing alternative for your projects, but you also experience being partners with someone with construction industry expertise — who truly understands what your business needs. 

Why roofing companies use material financing

First and foremost, contractor material financing is one of the easiest ways to kickstart your business growth, since it gives you the freedom to take not only more projects, but also higher and more ambitious ones. 

In this regard, do you presently feel comfortable with bidding projects twice the size of your normal bid

Do you have a relationship with a lender who understands your business needs and is willing to extend credit on large projects? Even if payment terms are extended, there’s no doubt that you’d still come out of your pockets to purchase materials exactly when you need them. 

However, with a material financing partner, you get to bid confidently on projects like these knowing that the costs will be covered. Besides, you’ll also be bestowed with the flexibility to repay on the timeline that works the best for you. 

Free up your own cash for other expenses 

Even if your cash flow is comfortable enough to pay suppliers on your own, using material financing gives you that financial clout, strength, and experience necessary to improve your business growth initiatives, generate additional revenue, and most especially in competing with other firms in the market.

With flexible payment terms, you’d have the opportunity to hire skilled marketing or sales talent. Contractor material financing simultaneously helps you free up your own cash to spend on increasing advertising, or field team workers necessary to take on more projects.

With no inconsistent cash flow limiting you, you’d be fascinated at the number of opportunities you could seize to further innovate and grow. 

Complete more commercial roofing projects

If you’re considering taking on bigger commercial roofing jobs, contractor material financing is an optimal way to support your success with an even lower risk. With commercial projects, the budget, the stakes, and the expectations are all significantly higher, so can’t afford to let poor cash flow hinder you from meeting your desired objectives. 

Aside from this, timelines are also crucial in commercial projects. One dysfunction from a subcontractor can slow down your whole process. If for example, you fail to pay your supplier on their terms by the time new materials are needed, this could cause them to hold back in selling you more, forcing you to find new suppliers and eventually, slowing down your project. 

However, by working with a material financing partner, you would have no qualms in paying your supplier upfront and complete your commercial projects on schedule while still building a good reputation. 

Minimize business stress 

Running a business is already stressful in itself, without the extra burden of construction payment cycles. When you’re stacked with the responsibility of your business’s success and your employees’ well-being, this can stretch you too thin financially and mentally. 

When you work with a financing partner, you enjoy full relief from these pressures, for it comes with the ability to pay your suppliers upfront without consistently worrying about whether you would receive payment from your last project. 

The freedom and flexibility of contractor material financing help your supplier get paid on time, and you can have a one-track mind in terms of focusing on growing your business. 

Realize the full potential of your roofing business

You don’t have to succumb to inconsistent cash flow just to grow your roofing company. With contractor material financing, you liberate yourself enough to work on more roofing projects, innovate certain areas and lower your stress, all while being assured that your business gets to reach its full potential.

Get materials now, keep your cash.

Enjoy 120-day payback terms with any material supplier.

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