How Can Lenders Help Roofers Deal With Insurance?

Insurance
#1

For a bit of background, I work as a loan officer at a private fintech lender. Unfortunately, I had a roofing client recently have to take out an expensive merchant cash advance (Mca) where he paid double the amount back he borrowed in a matter of months.

He told me he had to take the cash advance because the initial payment he received from an insurance company wasn’t nearly enough to complete a job.

What if a lender was able to advance the insurance payments to roofers?

Yes, I know this would be complicated to set up, but I primarily want to know is this something that would be helpful or widely used? I am not sure if my clients case is unique or this is something that seems very common.

Here’s how I understand how the process works:

Home owner receives ACV minus deductible and depreciation in check form to pay to the roofer. From my understanding this process may take a while? How long? And often times the ACV will hardly cover the cost of the repairs. After the job is done it might take 3-4 weeks to receive the recoverable deprecation.

Why does it take insurance companies so long to release the recoverable payment? Is it ever the fault of roofers being slow to talk with insurance companies or sending poor photos and information?

Will a good roofer be able to predict how much money he’ll need above the amount the ACV covers when the project is still starting? (If we can predict how much over the cost of ACV the job will be, we’ll know how much we can give the roofer at the start of the project.)

My father owned a small construction company growing up and I wish it wasn’t so hard for small business owners to deal with financing their jobs. Is there any other way the finance industry can help people?

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#2

So here is the breakdown:
You work for a predatory lender.

You “unfortunately” had a poor businessman/insurance victim pay 200% interest on a loan.

Your Father was a contractor.

Conclusion: you are a slime ball

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#3

No not at all. I helped the client obtain a home equity line of credit about a year ago. He had to take a high interest loan recently from someone else that I do not promote. I was very upset by this.

Im trying to see if there’s anyway lenders can help finance roofers in the time period between when they start a job and when they get paid by the insurance company.

I have only been a loan officer for two years but saw how finance was hard on my father and was also deeply upset by what happened to our companies client. I’m really on the bottom of the totem pool of my company so I probably can’t do anything but maybe one day I will be able to.

I could either sit down and do nothing or try to learn and help. Im sorry if I was not clear in the original post.

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#4

Factoring companies do something like this for truckers who get paid on net30
Idk if it’s feasible for construction, most guys are on crack in between spending customers first deposit checks :laughing:

#5

Do you get more production if they’re on meth?

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#6

I guess the other main issue is why can’t a legit company wait 3-4 weeks for their money?

#7

ehhh fair enough - when you look at the apr of factoring its really predatory in itself and highway robbery. so maybe its not the best solution

#8

hmmm good point. The client I originally talked to is the one who suggested this idea to me. Maybe only non legit companies have this issue or really iressponsible ones… I’m kind of in a blind spot because I suit on excel all day and talk to roofers but don’t know what its really like to be a roofer … the irony is not dawned on me that people providing financing really know too little about what its like to do the job of who you’re providing financing to. I appreciate your advice

#9

Why would a contractor, want to take out financing for a client? I already have a process for inhouse financing of those who have to wait a week for the replacement cost value funds. I don’t know of anytime this has been an issue. I think you had one person who didn’t understand their policy and went to a payday loan and took on the 290% interest.
If you are running your business as a paycheck to paycheck, you aren’t running the business, it’s running you.

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