Finance options

J

Jasonk

Participating member
Who's offering finance options for their clients and what banks are you using? As our jobs get larger and larger, it makes sense to at least offer the clients an option.
 
Do you take credit cards? That tends to take away from financing. We eat the cost of charges since last Oct but it turned out to be a positive. People were more likely to swipe for more work.


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Tr33Climb3r said:
Do you take credit cards? That tends to take away from financing. We eat the cost of charges since last Oct but it turned out to be a positive. People were more likely to swipe for more work.


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We do. Same thing, we eat the 2% charge but people tend to pay right away which makes it worthwhile. I just was thinking it would be nice to have as an option if needed. If someone needs $10k in tree work, that can be a big purchase. Possibly larger than a credit card limit.
 
For some of our very good friends we carry the invoice and normally it’s only work done In the beginning of winter. This gives us a little extra money coming in when we have little work. And the invoices are normally below 2k (they are older on a fixed income). As for larger projects we normally don’t get into customers that need credit for large jobs. They either have the whole project completed (if they have the money) or break it up into manageable size jobs for them to handle according to the priorities we agree on. We currently do not accept credit cards either so they either pay cash or check.
I normally don’t mind having a balance in our accounts receivable. It gives us a bit of float when we get really bad weather, or I want to take a week off. It’s a very good way to take the peaks and valleys out of the cash flow storm.
 
I finance the larger jobs...if needed. I don't charge interest but do charge a set rate based on how much they want to finance. Usually we are so booked out that I receive a deposit the day they accept the job. Then I get another payment a month later....so before I have even set foot on the property I have received two payments. Then we do the job and we invoice them the remainder on Net30. Thats typically three payments in about three months. I usually don't go much over a 3 month payment period unless its a unique situation.

This summer we were booked out to full capacity. I was approached by a large management firm that managed large commercial properties. The properties are each run on their own budget and they were tapped for the year and could not spend anymore on tree removals. I suggested that we do the work in the summer and they can all pay starting in January. I didn't need the money in the summer because cash flow was excellent. Now, I am sitting here in January with 7,500 a month coming in for the next three months. It makes it easier to stay in on theses wet days.....but does not help if you need that money for a large purchase of equipment.

I actually like to offer the payment plan to people...I feel it helps with the large cost burden of tree work. Just means the business has to be good at money management. Which can be hard at times.
 
@ROYCE I offer payment plans with customers as well. I have never asked for a payment when the contract is signed only when the job is complete. I have been thinking of setting up my payment terms like you mentioned above. Makes sense to get at least a third of the payment upfront to cover cost and keep the cash coming in. I have a small Tree Service. I sub out my debris removal for the bigger jobs and always sub my stumps out so getting the first payment before I start I know at the very least know most of my cost is already covered in case a customers payment is late.


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