For roofing contractors, managing cash flow efficiently is paramount—not just for sustaining operations but for fueling growth. Juggling multiple projects with extended payment terms often strains financial resources. In fact, the Small Business Administration states that a large part of why most roofing contractors’ businesses fail is due to financial issues. This is why you need quick access to working capital if issues arise. While common financing options like bank loans or merchant cash advances (MCA) are common, they often fall short of addressing the unique needs of the construction sector. Factoring, however, offers a more tailored and immediate solution.

Factoring Basics

Factoring, also known as accounts receivable financing, is a popular financial solution commonly used in many industries including construction. This funding option allows roofing contractors to sell their unpaid invoices to a factoring company like CapitalPlus at a discount. Unlike traditional bank loans, factoring provides working capital in a much faster manner—often within 24 hours—enabling you to continue the momentum in your business operations without the typical 30-90-day wait.

Comparing Factoring with Other Common Funding Options

Understanding the concept of factoring is just the first step. When compared to other financial options, the benefits of factoring become even more compelling, especially in the context of the roofing industry’s typical financial hurdles.

There are many financing options available to roofing contractors needing temporary working capital. But understanding the basics of each ensures the “right fit at the right time”. Among the most often considered are bank loans and MCAs for roofing businesses.

  • Bank Loans: Reliable and cheaper but not always accessible, bank loans require a solid credit history, sufficient collateral, and patience for a lengthy approval process—requirements that can be prohibitive for many contractors.
    >> Learn more about why banks do not like funding construction.
  • Merchant Cash Advances: While MCAs offer rapid funds, their high-interest rates and daily repayment terms can further complicate cash flow rather than relieve it.
    >> Learn more about why MCAs may not be your best option for quick loans.

Exploring Factoring Advantages

In addition to the speed of funding, factoring also offers other advantages over the limitations of traditional financial outlets. Unlike bank loans, invoice factoring relies on the creditworthiness of your clients rather than only your company’s credit score. This provides a funding route that works with the roofing contractor who has a less-than-perfect credit rating.

Specific Benefits of Factoring for Roofing Contractors

  • Immediate Cash Access: Factoring quickly turns unpaid invoices into working capital, which can be critical for covering immediate expenses such as payroll, material costs, or even starting new projects.
  • Credit Flexibility: With factoring, your financial history doesn’t determine your funding options. Since approval hinges mostly on your clients’ credit strength, you can access funds even if your own credit is less than perfect.
  • Scalability: Factoring lines can grow with your business. As you secure larger contracts or increase your invoice volumes, the available funding adjusts accordingly, making it a scalable solution that supports expansion.

These specific benefits demonstrate how factoring not only addresses immediate financial needs but also supports long-term business growth and stability. This makes factoring for roofing contractors an ideal choice when looking to expand their business without the burden of restrictive loan conditions.

Why CapitalPlus Stands Out

At CapitalPlus Financial Services, our 25+ years of expertise in the construction industry allows us to offer bespoke factoring services that truly understand and meet the challenges faced by roofing contractors. We don’t just provide funding; we offer other services, like materials purchasing, that support your business cycles when factoring is not required.

Client-Centric Approach

Our commitment to flexibility designed around construction trades’ needs means we offer solutions like no long-term contracts and no monthly minimums, ensuring that our services are as adaptable as the projects you manage.

Client Success Story: A Connecticut-Based Roofing Contractor

Over the years, we have worked with many roofing contractors. Take this well-established commercial roofing and siding contractor in Connecticut. Faced with significant cash flow issues after they landed two large contracts with extended payment terms, they turned to merchant cash advances. However, they quickly learned that the high interest rates of their MCA were not going to work. They needed a better solution to manage their finances.

CapitalPlus stepped in to provide $500,000 in accounts receivable funding. This funding allowed the contractor to clear their expensive MCA debts and sustain their daily cash flow, which was crucial in continuing vendor payments and ensuring the continuity of their projects.

Reflecting on Success

This success story underscores the transformative impact factoring can have on a roofing contractor’s financial health and operational capacity, showcasing how tailored financial solutions can often resolve complex challenges effectively.


For roofing contractors, choosing the right financial solution is critical for both your immediate needs and long-term success. Factoring can offer a strategic advantage, providing swift, flexible funding tailored to the unique rhythms of the construction industry. With CapitalPlus, you gain more than a financier; you gain a partner dedicated to your business’s growth and stability. Contact us today to discover how our factoring solutions can work for you.

>> RELATED READING: CapitalPlus Case Studies for Various Construction Trades

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