Remain in the construction industry for more than two minutes, and slow pay soon becomes the bane of your existence. There’s a good reason for that. According to the Construction Payments Report 2018, late customer payments cost the commercial construction industry a whopping $40 billion annually.

The report was based on a study conducted by Contract Simply, a construction loan software provider. It surveyed 1,300 contractors from various trades. The study found that 88 percent of contractors wait more than 30 days for payment. Forty-six percent of those contractors are forced to dip into business or personal savings or credit lines in order to cover operating costs. That hurts, especially when your profit margins are already razor thin.

Of course, getting payments sooner would be a boon for your bottom line. One way to do this is with point of sale (POS) loans.

Construction companies can really benefit from a streamlined financing program, because of the sticker shock that comes with home improvement projects.

POS Loans for Construction

“Point of sale financing refers to the financing options offered by businesses to help customers purchase their goods or services at the time of the sale,” says Miron Lulic, CEO and founder of, a financial products and services comparison website. “Such POS financing options—typically credit cards, unsecured loans, or lines of credit—make it easier for consumers to pay for expensive products or services.”

A fast-growing point of sale subset is POS loans. This industry is nothing new. Lenders, particularly banks, have been offering POS loans for decades. Classic examples include the loans available in the financing departments of auto dealers, furniture stores, and dentists’ offices. However, such loans haven’t been standard in many other industries, including construction. Historically, they’ve also been expensive and hard to implement.

“The good news is that advances in lending have made it possible for many companies, including construction businesses, to offer instant credit decisions to their customers,” says Lulic.

Benefits of POS Loans

The benefits of POS loans for construction can be substantial. “Companies offering POS financing see an uptick in sales, an increase in average order value, and significant gains in their profitability,” says Lulic.

Construction companies, in particular, have a lot to gain from a streamlined financing program.

Construction companies, in particular, have a lot to gain from a streamlined financing program, because of the sticker shock that comes with the price of construction and home improvement projects.

“Let’s say a homeowner needs a new roof,” says Lulic. “The average cost, according to HomeAdvisor, is $7,345. That’s a lot of money for most Americans, considering that according to the Federal Reserve, 44 percent can’t even cover an unexpected $400 emergency expense. A homeowner is much more likely to accept that roof quote if it’s offered as a monthly payment option.”

Drawbacks of POS Loans

POS financing programs can be expensive. Such loans are usually offered at no additional cost to customers. However, business owners are sometimes hit with what is marketed as a discount fee, says Lulic.

“In theory, the discount fee—typically 10 percent of the loan amount—offsets the cost of providing preferential rates to customers,” explains Lulic. “But in reality, it’s mostly a commission POS financing companies charge for their services.

“A 10 percent commission is a chunk of change—$2,500 on a $25,000 loan,” continues Lulic. “Businesses are forced to pass this cost on to customers. That makes it hard to compete with larger companies that have financing programs.”

Affordable POS Options

When you check into a POS loan solution for your company, look for one that features no or low monthly fees and 0 percent discount rates, suggests Lulic. “At SuperMoney, for instance, customers can borrow up to $100,000, and our financing solution accepts customers with all types of credit. This financing platform offers companies a turn-key financing solution that doesn’t cost a penny to implement. This is a win-win for contractors and customers.”

Whatever POS option you do choose, make sure to let your customers know from the get-go that your company provides many options for paying, including a POS loan option. It may help with your bidding to point out that quick payment from customers means you can pass the savings on to them.