Business Line of Credit for Roofing Contractors
A business line of credit gives a roofing contractor a set limit for materials, crew pay and the wait on insurance checks, and the interest meter runs only while money is out. Draw before the tear-off, repay once the job pays. For gaps that repeat every season it beats an advance on cost, but expect funders to ask for a couple of years in business, orderly books and good personal credit.
How roofers use a line
Materials on delivery
Shingles, underlayment and flashing get bought off the line; the draw comes back out of the homeowner's or carrier's payment.
Waiting on insurance
Insurance jobs often pay in stages, and the final check can take weeks. A draw covers crew pay in between.
The winter slowdown
When cold weather slows replacements, a draw keeps core crew on payroll until spring.
What drawing for February costs
Limit $52,000, price 2% monthly on what's outstanding, deposits around $150,000. The owner takes $18,000 to cover February, then pays a third back each month.
| Step | Balance on the line | Cost that month at 2% |
|---|---|---|
| Draw in February | $18,000 | $360 |
| After one repayment | $12,000 | $240 |
| After two repayments | $6,000 | $120 |
| Paid back | $0 | $0 |
Total cost lands around $720; unused limit costs nothing unless there's a fee. Per BLS, roofing contractors (NAICS 23816) employ the fewest people in February (94.6 on a 100 average) and the most in July (103.7).
What line funders ask for
- Recent returns plus a year-to-date P&L.
- A list of jobs in progress and expected payments.
- Several months of bank statements.
- Personal credit for each owner.
Roofers with daily advance debits usually need to reduce them before a line is approved.
What not to use the line for
Trucks, trailers, lifts and dumpsters belong on equipment financing. A line tied up in equipment has no room for materials when storm work arrives.
Keeping the line healthy
Tie every draw to a roof and clear it when that roof pays. Zero the balance after the busy season. At the yearly review, a balance that creeps up all winter tells the funder the business is short, not just waiting on checks. A clean cycle is what gets the limit raised.
Supplier accounts versus the line
Many roofers carry trade credit with their distributor. Using that first, then drawing only for gaps it doesn't cover, keeps the line's balance lower. Funders reviewing the line will see supplier payments on your statements, so keep those current too.
Quick answers
Can a roofing contractor get a business line of credit?
Many can. Funders tend to want two or more years operating, financials that reconcile to the bank, decent personal credit and a current list of jobs underway. A roofer already carrying daily advance payments is usually asked to shrink them before the line opens.
How should a roofer use a line of credit for insurance jobs?
Draw for materials and crew pay when the job starts, then repay as the insurance payments arrive. Track each draw against its job so you know which checks are still due, and keep the balance moving down.
Is a line of credit better than an advance for a roofing company?
When the need repeats, like materials on every job and weeks waiting on carriers, the line wins on cost since you only pay for days the money is out. An advance makes sense for a sudden storm rush or a newer roofer whose books can't support a line.
More for roofing contractors
- Same-day merchant cash advance for roofing contractors
- Second position MCA for roofing contractors
- MCA consolidation for roofing contractors
- Revenue-based financing for roofing contractors
- How funders read roofing contractors
- Business line of credit: how it works
Run your own numbers with the MCA APR calculator.
Want to see what fits a roofing contractor like yours?
Tell us your slow months and your open advances, and we'll shop the file with funders whose programs fit. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.