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Jason Bogucki Posted: Jan 12, 2010 09:26 AM	What type of deposit is needed for a sprayfoam contractor? I am in the process of hiring a contractor for spraying my basement, a red flag came up when he asked me to provide a 50 percent deposit. Is that normal for spray foam contractors? I am used to paying when the job is done (smaller jobs) or at most 10 percent of the total bill. What do you guys think?
richard sucher II Posted: Jan 12, 2010 11:45 AM	Request for 50% downstroke does not seem to be out of line at all. With first time customers we would require this amount. We would also provide customer with lien waiver for the materials used and bill the remining balance due upon completion. With established customers, we would invoice 100% due upon completion. In some cases, we extend N30 days from date of completion.
SPFer Posted: Jan 12, 2010 03:10 PM	Keep in mind that with spray foam, the material cost is often over 50% of the entire project cost. We ask for 1/3 upon agreement, 1/3 upon start and 1/3 upon completion. So, we are essentially getting 2/3 upon start. So no, I do not think your contractor is being unreasonable.
Posted: Jan 12, 2010 06:20 PM	50% is pretty standard. I have larger customers who will be in 30 days, such as Exxon, Shell and large contractors. Even on State jobs, we get paid for the material once it arrives on site. New customers we go 50% material deposit up front. It's to tough to collect money once the job is done and the customer doesn't have any money. The only option that we have is to file a lien, which doesn't get paid until the property is sold. Make sure your contractor has been around a while and ask for references if you are worried about giving them 50% up front.
Posted: Jan 12, 2010 11:35 PM	net 15 or net 30 pending on the size of the job.. unless you gots cash....cash is king!!!! lol...whoa,,did i just say that...
Terry Adams Posted: Jan 13, 2010 12:05 AM	Sometmes its because the contractor has no credit and has to buy material to start. 50% would only cover material at best so its not out of line for this product.
quentin Posted: Jan 13, 2010 12:57 AM	Yup, same as the others. I had one client ask me why when he had several different foamers quote a job we all asked for 40-60% up front and I told him the same as others are telling you. Also even if the individual cancels, you have a set of foam you have to store, keep warm and safe and with the market going all nuts you never know since it does age. Learned the last the hard way when they shrank the job on me from a set to 1/4 of a set at the time construction took a screeching halt and barely managed to sell enough more of it to break even before it was contaminated.
mason Posted: Jan 15, 2010 07:51 AM	As others have noted, 50% down is pretty standard in the business. This typically will cover the materials so that the contractor is not out substantial bucks just to get the job started. This is important to contractors to protect themselves. A big reason I went broke in the 80s was performing work for general contractors without an upfront deposit. 3 of my regular clients went bust on me after I had sprayed quite a lot of foam and they could/did not pay for even the material costs.
Jason Bogucki Posted: Jan 15, 2010 08:14 AM	I've warmed up to the 50% deposit, thanks for the replies, but now that I am ready to make the deposit I can't seem to get a contract, most interaction is over the phone and to protect myself from loosing my money I would like something in writing before mailing out the deposit. Think it is time to move onto my second choice in sprayers.
Dennis Davidson Posted: Jan 15, 2010 10:49 AM	Don't make your decision based on some paperwork. I know several "good" contractors that have a problem doing their paperwork. As long as you get something written with a detailed description of the project and the agreed $ amounts with your signatures then it's a legal contract in most states. Good paperwork doesn't make a good contractor.
Posted: Jan 15, 2010 09:03 PM	again... real business here,.. like the general contractor.. he draws once a month,,so he pays once a month net 30 homeowner general..his construction loan is in most cases managed by the bank,,they pay once a month draws so net 30 gas for the lawn mower was cheap...foam aint... waa hire a pro,,for more than 1 reason

Author

Comments

Jason Bogucki

Posted: Jan 12, 2010 09:26 AM

What type of deposit is needed for a sprayfoam contractor?

I am in the process of hiring a contractor for spraying my basement, a red flag came up when he asked me to provide a 50 percent deposit. Is that normal for spray foam contractors? I am used to paying when the job is done (smaller jobs) or at most 10 percent of the total bill. What do you guys think?

richard sucher II

Posted: Jan 12, 2010 11:45 AM

Request for 50% downstroke does not seem to be out of line at all. With first time customers we would require this amount. We would also provide customer with lien waiver for the materials used and bill the remining balance due upon completion. With established customers, we would invoice 100% due upon completion. In some cases, we extend N30 days from date of completion.

SPFer

Posted: Jan 12, 2010 03:10 PM

Keep in mind that with spray foam, the material cost is often over 50% of the entire project cost. We ask for 1/3 upon agreement, 1/3 upon start and 1/3 upon completion. So, we are essentially getting 2/3 upon start.

So no, I do not think your contractor is being unreasonable.

Posted: Jan 12, 2010 06:20 PM

50% is pretty standard. I have larger customers who will be in 30 days, such as Exxon, Shell and large contractors.

Even on State jobs, we get paid for the material once it arrives on site.

New customers we go 50% material deposit up front. It's to tough to collect money once the job is done and the customer doesn't have any money. The only option that we have is to file a lien, which doesn't get paid until the property is sold.

Make sure your contractor has been around a while and ask for references if you are worried about giving them 50% up front.

Posted: Jan 12, 2010 11:35 PM

net 15 or net 30 pending on the size of the job..
unless you gots cash....cash is king!!!!
lol...whoa,,did i just say that...

Terry Adams

Posted: Jan 13, 2010 12:05 AM

Sometmes its because the contractor has no credit and has to buy material to start. 50% would only cover material at best so its not out of line for this product.

quentin

Posted: Jan 13, 2010 12:57 AM

Yup, same as the others. I had one client ask me why when he had several different foamers quote a job we all asked for 40-60% up front and I told him the same as others are telling you. Also even if the individual cancels, you have a set of foam you have to store, keep warm and safe and with the market going all nuts you never know since it does age. Learned the last the hard way when they shrank the job on me from a set to 1/4 of a set at the time construction took a screeching halt and barely managed to sell enough more of it to break even before it was contaminated.

mason

Posted: Jan 15, 2010 07:51 AM

As others have noted, 50% down is pretty standard in the business. This typically will cover the materials so that the contractor is not out substantial bucks just to get the job started.

This is important to contractors to protect themselves. A big reason I went broke in the 80s was performing work for general contractors without an upfront deposit. 3 of my regular clients went bust on me after I had sprayed quite a lot of foam and they could/did not pay for even the material costs.

Jason Bogucki

Posted: Jan 15, 2010 08:14 AM

I've warmed up to the 50% deposit, thanks for the replies, but now that I am ready to make the deposit I can't seem to get a contract, most interaction is over the phone and to protect myself from loosing my money I would like something in writing before mailing out the deposit. Think it is time to move onto my second choice in sprayers.

Dennis Davidson

Posted: Jan 15, 2010 10:49 AM

Don't make your decision based on some paperwork. I know several "good" contractors that have a problem doing their paperwork. As long as you get something written with a detailed description of the project and the agreed $ amounts with your signatures then it's a legal contract in most states. Good paperwork doesn't make a good contractor.

Posted: Jan 15, 2010 09:03 PM

again...
real business here,..
like the general contractor..
he draws once a month,,so he pays once a month

net 30

homeowner general..his construction loan is in most cases managed by the bank,,they pay once a month draws
so
net 30

gas for the lawn mower was cheap...foam aint...
waa
hire a pro,,for more than 1 reason

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