On Jul 7, 7:16 pm, "Nancy Young" wrote:
"RicodJour" wrote

On Jul 7, 1:26 pm, "Nancy Young" wrote:
If I've read it once, I've read it a million times. If the local
suppliers
don't trust the person enough to extend credit, there is probably a
reason. I have never had to front anyone money for supplies.

Let me see if I understand you. You want the contractor to front you
money (that's what he's doing when he buys materials for your job
before you've paid for them), but you don't want to front money to the
contractor. Does that sound right to you?

I don't think they put any money out. That's the point.
Contractors who don't pay their bills have to pay cash, they
have to put money out. Needing money for supplies is a red flag.

The number of assumptions in those four sentences is astounding. You
have not let us know how you establish that the contractor "needs" a
deposit as opposed to "wants" a deposit. You have assumed that there
is only one way for a contractor to do business - by using supplier
credit. What if the contractor only has an account at a place that
has higher prices? Who do you think ends up paying for that? Hint -
it's not the contractor.

Supply houses frequently give substantial discounts to contractors for
paying at the time of ordering and in cash. Supplier credit costs the
supplier. They're extending a short term loan to the contractor. It
costs the supplier money and it increases the risk for them. Nothing
is life is free - that cost and risk is added to the price of the
materials. They reward people for not increasing the cost and risk by
giving discounts. The same way you seek a good buy, a contractor
seeks a good buy.

You said you don't "think" they put money out. You seem to have
confused cash, credit and liability. I would imagine that you have a
mortgage on your house like most people. Even though you are not
paying all of that money at once, you are liable for paying all of the
loaned money back plus interest. As soon as a contractor places an
order, they are liable for payment of the dollar amount of that
order. If you ignore your mortgage payment, or the contractor doesn't
pay the supplier, the charge and liability are still there. While
cash has not been laid out, there's still a nice fat red mark in the
debit column. That's a liability. The contractor's debt goes in the
debit column of the accountant's books. That debit gets canceled out
when you make payment. Until that time the contractor is loaning you
money.

You seem to be assuming that a contractor doesn't have a line of
credit if he doesn't extend the line of credit to you.

Frankly, I've never had to assume anything. The contractor
has always procured the products I ask for and when the job is
done, I pay them. I would anticipate paying as the job went along,
but if someone is a roofer and they can't even swing the cost for
shingles and plywood, I would not be comfortable handing them the
few hundred dollars.

I do not like the assumptions that the OP's roofer made, and said so.
We are not talking about that specific situation - we're now talking
in generalities. Saying "can't even swing the cost of" IS assuming.

I need to make a profit. That's why I am in business - to make a
profit. That doesn't mean I will automatically make a profit. I
don't need money to cover materials. That doesn't mean I won't charge
you up front for the materials.

When you say you "would anticipate paying as the job went along", what
do you think that means? When do you think the job starts? The
project starts as soon as the contract is signed and both parties have
agreed to the scope and price of the work, both are engaged in a
_construction_ project. Not a banking endeavor. I can afford to
cover materials. I won't cover materials. Why should I? I am not a
bank. I am not in the business of providing no cost loans. If you'd
like a loan to help _you_ swing the cost of the project, that's fine,
knock yourself out and talk to you local banker.

There are plenty of contractors who operate differently, and that's
fine as that is their business. However I do object to nonsense
exclamations like NEVER PAY FOR WORK UP FRONT as that is misleading
and will get nervous homeowners to throw out good contractors along
with the bad.

R