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?
