Commercial contractor slams residential contractors who ask for deposits
"I am not worried (about deposits). I am properly financed," says Tim
The difference between contractors who do strictly commercial work, and those who work for Mr. and Mrs. Small Homeowner, is perfectly illustrated by this recent comment on our “How Much Should You Ask for a Deposit” series… We think Tim misunderstands the many reasons for deposits and thinks they are just about cash flow.
When you go to your suppliers you immediately pay cash on the barrel before you leave the store or are you charging it to your account?
And you are issuing pay to your workers at the end of each day or are you paying them on a two week cycle plus a one week hold which is standard?
Here is the reality: Most small residential contractors have no business but simply work out of the back of their trucks with little recourse for the homeowner if something goes wrong. Those are the contractors I will never give a deposit to. The ones with a business storefront never ask for a deposit.
Lastly, as a commercial contractor it is standard for me to work the entire month, invoice at the end of that month and then not expect payment for another 30-40 days after that. I am not worried, I AM PROPERLY FINANCED!