Jeff
A few other approaches:
1. Joint check with 2 signatures from the bank
2. Lien release contingent upon payment to vendor
3. Contract with specific milestones outlining payment terms
4. Bridge loan from bank for 1 month- small interest to pay for the certainty
5. Collateral- your home or the clients property
6. Vendor willing to work with you on perhaps a promissory note, or through
someone or a lending institution
7. Rich friend who trusts you until they arrive at the site and the wait time
for the check to clear
As Bob stated, when you step into larger projects, it is another world.
Cash flow is king, as 80% of the larger projects are all materials....managing
this can be challenging, but there is always a way with willing participants.
BTW: has anyone heard that EGIA is offer financing for PV systems ? This could
be another channel for you Jeff........
Ciao
Keith
________________________________
From: Bob-O Schultze <bo...@electronconnection.com>
To: jry...@netscape.com; RE-wrenches <re-wrenches@lists.re-wrenches.org>
Sent: Tuesday, July 14, 2009 6:05:04 AM
Subject: Re: [RE-wrenches] large module orders - COD??
Jeff,
Welcome to the wonderful world of big business in 2009.
Most states allow a contractor to ask for a reasonable deposit upon executing a
contract. Often it's about 10%. On an order that size, I'd get whatever the law
would allow upfront and COD for the big ticket items. It's reasonable to leave
yourself on the hook for your labor and the smaller stuff until the job is
completed so long as your contract clearly states a short final payment
timeframe and as much interest and late payment fees as your state will allow
if they miss it. Almost all clients will accept that a contractor needs some
good faith money and go for that. Offer the same deal of 10% upfront to your PV
supplier and they'll likely say, "And where did you say you would like these
shipped?" Doesn't alleviate the problem of having to have good cash reserves or
good credit, but it will help.
If either the client or the distributor doesn't get it, do business elsewhere.
It's harsh and a bitch to have to walk away from a good job that you've put a
lot of energy into, but it seems unwise (at least in the present economy) to
extend yourself any further than that.
Good Luck, Bob-O
On Jul 6, 2009, at 6:57 AM, Jeff Yago wrote:
Most of our projects do not require ordering and stocking large quantities of
solar modules, so we usually order in one pallet at a time quantities since
most of our installs are in the 4 to 6 kW size range. However, we have a
firm purchase order for over $100,000 worth of Solar World 175 modules, but the
client will not pay anything until the modules have been shipped and received
in good condition. I have been able to get their agreement to pay COD, but
have not found any supplier who handles Solar World 175's and is willing to
fill this large order without payment in full at time of shipment.
If we cannot make this work, I will be forced to go back through the process of
getting another module approved for this installation and find a supplier
willing to make this work using a different module brand, but I hate to go
through all this after getting the SolarWorld 175's approvied by both the
architect and client. They are ready to purchase these today.
How do you handle these larger special orders without having to have a $100,000
line of credit with each material supplier?
Thanks,
Jeff Yago
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