how many of you offer financing? usually the customer has to sign a completion certificate after the job is done and thats when you get paid..my question is this,is it common for a customer to not sign in order to avoid getting billed? acting like they are unhappy with a GOOD JOB just to get out of paying> ? how is the contractor(me) protected against this? i know there is court but my guys and materials need to be paid for;is it safer when financing?
The only time I ever loan money without making it legal is when I would be perfectly happy to end up considering the money a gift. It's like backing up your computer. If you've done enough work that you'd hate to lose it, back up. If you loan enough money that you'd hate to lose it, make it legal (and you still might lose it). You probably laugh at HO's who start big jobs like hacking on loadbearing walls without consulting pros right? If you're going to offer financing, you should start a relationship with an attorney up front.
Personally, I'm not big enough to absorb the inevitable occassional loss that would come with a financing plan. Also, when I get asked to provide financing I immediately wonder why the person doesn't borrow money from somewhere else. Is it because everyone else thinks they're too big a risk? Then why should I risk my operation missing payroll when I come up short of cashflow when some borrower doesn't pay?
Last word: if I had no other work anyway, and I didn't want to just relax (what's that?) I might consider a deal where they pay at least materials and some portion of the labor upfront, but only if I thought I could go home one day after being burned and still be happy with my family.