Tips for Smart Commercial Roof Financing

Installing or replacing a commercial roof is a significant investment, one that you haven’t always budgeted for. Even roof repairs can be a significant setback if you need them at the wrong time.

However, delaying necessary roofing work can lead to much bigger problems such as structural damage or even safety risks for your building’s occupants.  This is where commercial roofing financing comes in. Financing options like roof loans, lines of credit, or contractor-provided programs allow you to manage costs effectively while addressing urgent roofing needs.

With the right approach, you can secure the best materials, warranties, and services for a roof that enhances your building’s value and durability without disrupting your cash flow.

Benefits of Financing a Roof Replacement

Installing a new roof can cost tens of thousands of dollars, depending on the size and the roofing materials used. Financing allows you to:

• Access the best roofing services when you need them
• Lower the initial replacement costs
• Spread the costs over several years

Just as homeowners can access personal loans, home equity loans, and lines of credit, several financing and loan options are available to business owners.

Roofing Financing Options for Your Business

Understanding your options for financing a commercial roofing project is the first step toward getting the best solution for your building and budget. The most common financing options available are:

1. Roof Loans

Loan programs are a popular choice for businesses needing a new commercial roof. Offered by banks or specialized lenders, they provide a fixed loan amount, flexible repayment terms, and competitive interest rates.

The approval process typically considers factors such as your business’s credit score, annual revenue, and the total cost of the roofing project.

Benefits of Financing Through a Loan

• • • Fixed monthly payments simplify budgeting and provide predictability
    • The interest portion of your monthly loan payments is a business tax deduction
    • Access to multiple lenders increases the chances of securing a competitive interest rate

2. Lines of Credit

If you need more flexibility, a line of credit offers funds as needed.

Like home equity lines of credit (HELOC) for homeowners, you can access a commercial equity line of credit (CELOC). This kind of line of credit uses the equity of your commercial property as collateral.

Instead of one lump sum, you can withdraw money as you need to cover the costs of your roofing project. You only pay interest on the amount that you borrow. This kind of financing program is beneficial if you anticipate needing funds for other projects in the future.

Benefits of Financing Through a Line of Credit

• • • No downpayment necessary
    • You only pay interest on the amount you borrow
    • You have access to the funds in the future if you need

3. Credit Cards

Credit cards may not be ideal for large projects like roof replacements, but they can be useful for smaller roofing services or repairs. They can also serve as a stopgap while waiting on approval for other financing programs.

Benefits of Financing through Credit Cards

• • • Easier and faster approval ratings
    • Potential for no-interest promotional periods
    • No need for a downpayment

Tips to Lower the Cost of Your Roofing Project

Financing can help you pay for your new roof or repair, but the interest rates make it more expensive over time. Plus, most banks that offer financing loans require 10-20% of the total costs as a downpayment. So reducing the overall cost is still a priority.

This doesn’t mean you should partner with fly-by-night roofers who offer cheap materials, shoddy workmanship, and no warranties. There are more reliable ways to lower the costs of your roofing project, such as:

1. Choosing the Right Roofing Material

The type of roofing material you choose can change the cost of your roofing project drastically. BUR can cost anywhere from $2-$5 per square foot, and metal roofing can cost anywhere from $5-$16.

Metal roofing lasts significantly longer than other materials, making it a cost-effective option in the long run. However, if financing your new roof is challenging, it may be wise to choose materials with lower upfront costs.

2. Take Advantage of Energy Efficiency Credits

If you install an energy-efficient roof, such as a metal roof or TPO, then you can claim it as a tax deduction to offset the upfront costs. While this won’t lower the cost of the initial installation, it can ease the burden of monthly payments later on.

3. Partner With a Cooperative Purchasing Roofing Company

A purchasing co-op, or cooperative purchasing agreement, allows businesses to work together to buy materials in bulk at a lower cost. Roofing contractors who participate in a cooperative purchasing agreement get you access to premium materials at competitive prices, which can help you lower your initial installation costs without compromising on quality.

We participate in The Interlocal Purchasing System (TIPS), a national purchasing cooperative that leverages the purchasing power of government entities in all 50 states. This cooperative purchasing agreement streamlines material procurement, offering faster and more cost-effective solutions.

What to Expect From a Roof Financing Program

The first step is to contact a reputable roofing contractor to determine your project’s needs and the total costs.  Then you select your financing program and begin the process.

1. Gather Information

After your roof assessment, contact your chosen financing program and complete the needed financial documents.

2. Approval

Once you submit your documents to the lender, they review them. Approval times can vary widely. Lower loan amounts may take only a few days to approve, while some may take weeks.

3. Agreement

When the lender approves your application, review the agreement outlining your monthly payment plan and terms. If it matches your budget and expectations, sign the loan.

Get Critical Roofing Services When You Need Them

Roof failure is a serious issue. It can put your commercial property and the people inside it at risk.

Commercial roofing financing allows you to address issues before they get worse. If you have enough for a down payment, a commercial loan program can help you secure the funds you need in exchange for low monthly payments. If you don’t have the money for a down payment or need more flexibility in what funds you want to access, then a line of credit may be right for you.

No matter which route financing option you choose, it’s important that you make wise choices for your budget and your building. Choosing the right material and the right roofing contractor can help lower your overall cost without compromising on quality. With careful planning and the right financing program, you can secure a durable, high-quality roof that enhances your building’s safety, energy efficiency, and longevity.