Our latest episode features a conversation between the Rocket Roof Show producer Jonathan Keim and Andrew Klips of The Barrett Edge. The discussion centered on the financing needs of roofers.
ANDREW’S STORY IN A NUTSHELL
Growing up Andrew learned construction at the hand of his father. His brother was in custom millwork, and while Andrew was attending Ohio University, he found himself working construction and running commercial crews as a superintendent. He also dabbled in Wall Street with a keen interest in the financial side of business. A fall down the stairs brought an unexpected arm surgery and sudden turn from construction. His background in corporate banking and networking over the years gives him an “edge” in understanding the inside process. He has now been handling the needs of his clients for 15 years.
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FINANCING FOCUS
The Barrett Edge focuses on expansion capital and tailoring each approach directly to the needs of the client. Every business owner has their own unique set of circumstances, needs, and goals for growing, taking care of employees, and reaching success.
They differentiate from traditional banking and customize by the real need, working hands-on with clients so cost for capital is reduced over time.
The Barrett Edge is one of the few that work to negotiate with the underwriting process. They call their clients “funded partners” because the goal is to work together for understanding the specific situation and meeting that direct need. According to Andrew, “the best business is repeat business, that’s what we strive for.”
TIMES HAVE CHANGED, BUT NOT SO MUCH
We all know COVID-19 has brought many changes, and discretionary spending has seen limitations in recent months. Andrew encourages roofers to remain focused and turn this negative into a positive. Try to grow during this time and “continue to go in a time of trouble”.
Lenders are not as risk adverse as in past months. Also, Andrew advises business owners to investigate the available PPP (Paycheck Protection Plan) offered by the government. He believes these are great loans for businesses, and as long as you “put the money where it’s supposed to go” (mainly payroll), the loan will be forgiven and treated as a grant for most.
PRE-APPROVED HIGH-INTEREST LOANS
MCA (Merchant Cash Advances) are among many loans available, which can be helpful in certain circumstances, but are very “in the box thinking” and may view you as a target to some degree. These lenders have a very precise formula the contractor needs to meet.
MCA loans make the monthly payment seem reasonable but if you look at the details, you will find a very high interest rate. These loans have a short pay off period and are there to give you a quick lift if that is the most essential. Andrew warns not to get caught short-sighted by having money at your disposal.
OTHER CONSIDERATIONS
Lenders typically have a five to six step application process and will want expected records for things like accounts receivables and payables, taxes and so forth. Having someone like Andrew on your side helps you look at all aspects, decide the best path forward and create a game plan to meet your shorter and longer goals ahead. You may want a capital advisor with experience to help you evaluate, so you don’t jump too soon and regret. Sometimes you have to do what you have to do, but it is better to avoid certain kinds of lenders without a game plan. Get your game plan on!
The roofing industry is a very capital-intensive industry. Owners must meet payroll, buy material, bid jobs, continue upkeep on the building, and distribute marketing expenses.
Tune in to hear Andy’s many insights.
SPONSOR APPRECIATION
Special thanks to our sponsor Top Roof Marketing, a full-service marketing group that specializes in the commercial roofing industry.
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