Are you a skilled tradesman who wants to start a roofing company? Do you also have great marketing ideas in place and are ready to hit the ground running but there’s just one thing holding you back? You lack the needed working capital to get your business off the ground. Fortunately, there are numerous roofing contractor loans available to help you fund your new business venture. Here are four of the most popular funding sources for roofing contractors.
1. Equipment Financing
In the roofing business, having the proper equipment is essential. Without it you wouldn’t be able to kick start your company. Oftentimes, the high-quality equipment needed comes at a hefty price leaving most business owners in a position where they cannot afford the out of pocket expense. But once again, Equipment financing is a great solution for meeting your equipment needs.
You don’t have to pledge any business or personal assets because the equipment purchased acts as collateral for the loan. This means that lenders can take on more risk and offer lower interest rates. You can also repay the loan as you generate revenue from your business, and use the depreciation of the equipment as a tax benefit over a period of time.
2. Roofing Business Cash Advance
If you find yourself in a cash flow pinch and in need of money ASAP, a merchant cash advance is the ideal solution. With this type of financing you can sell your future revenue in exchange for instant cash. A roofing business cash advance is technically not a business loan. But rather it’s a cash advance against your company’s future receivables. With a cash advance, the funding company hands you a percentage of your total receivables.
3. Business Line of Credit
It’s a fact businesses need quick access to cash to cover their daily expenses. A business line of credit makes cash available to you whenever you need it. To improve your chances for approval, it’s best to apply for a line of credit before you even need the money.
This type of financing is somewhat similar to a credit card. You can withdraw money from your predetermined credit limit, and you only have to pay for the money you’ve used plus interest. Once you pay back the money, you can draw from your account again, given that you don’t exceed the credit limit. Many business owners prefer a business line of credit since you don’t need collateral, it’s revolving, and readily available when the need arises.
4. SBA Loans
If you’re looking to get bank rate financing for your small roofing business, SBA loans are your best option. It’s difficult for small businesses to secure a bank loan, which is why the Small Business Administration (SBA) created loans to specifically help small business owners secure conventional business loans. The SBA offers incentives to lenders in order to provide financing for small business owners by covering (up to 85%) of the loan, thereby virtually eliminating risk for the lender.
Roofing Contractor Loans for Your Business
If you want to know all of the details regarding a roofing contractor loan for your business, the finance experts at SMB Compass can help!