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For smaller construction projects, you may want to keep things simple, and cash can be a quick and easy way to handle payments. The biggest benefit of paying in cash is that it allows for an immediate exchange — there is no waiting for a check or ACH to clear or additional steps involved. It's important to note seldom are there any fees associated with cash payments, so you do not have to cover processing fees or pay hidden costs. 

It's easy to feel more in control of your budget, knowing the exact amount you’re paying without any surprises. However, for larger payments paying in cash can also feel risky, especially if you're handling a large sum of cash. If something happens to the cash or there’s no clear record of the payment. For larger projects, cash payments can also be impractical due to the sheer amount involved. This method of payment is seldom used these days as more and more customers are opting to embrace some other methods of payment.

Another payment method that is becoming less frequent these days would be writing a check. For some older generations, it is still a familiar and straightforward method, especially for significant transactions. There is comfort in knowing that you can keep a physical or digital record of the payment for your records. Similar to cash, when paying with a check, there's no need to worry about extra fees or processing charges. However, it’s important to keep in mind that check payments aren't instantaneous. 

Your funds won't leave your account right away, which could delay progress on your project if there is a long wait period for the check to clear your bank account. One last thing to consider is if there’s an issue with your bank balance, causing a check to bounce, that can lead to additional fees assessed by the contractor as the banks will charge the person making the deposit a fee.

Like them, love them or hate them, one of the more popular methods of payment these days is credit cards.  If what you are seeking is convenience and flexibility, then paying with a credit card might be the best option for you and your renovation. Credit cards are considered an instant payment, which means you don’t have to worry about timing or delays. Additionally, there is fraud protection for the consumer built into most credit cards. This offers a level of security and protection while going through a home renovation. For many, the ability to pay overtime is another huge advantage. 

Maybe you want to spread out the cost of your project, a credit card lets you do just that. You can spread out the cost over several months or billing cycles, easing the immediate financial burden. However, it’s important to note that most companies, New Beginnings Construction included, may pass along the credit card processing fees to you, potentially adding 2-3% to your total project cost. This can become noticeable, especially for high-ticket projects. The companies that absorb the credit card fees most likely have already built that additional profit into the job to cover any processing fees, adding to the cost of projects that don’t end up paying with a credit card. If you prefer to avoid fees or hidden costs and want to keep your expenses as low as possible, then maybe credit cards are not the right payment method for you. 

If you’re looking for a secure, low-cost payment method, ACH transfers might just be the way to go. This option allows for direct electronic payments between your and the contractor's bank accounts, often with much lower fees than credit cards. If you’re handling recurring payments or a phased construction project, ACH can streamline the process without worrying about sending multiple checks visiting a bank, or paying the higher processing fees associated with most credit cards. 

At New Beginnings Construction we prefer this method of payment as it is secure, fairly quick, and also the fee is low enough that we absorb this fee as a cost of doing business. That being said, there are a few drawbacks if looking at them honestly, ACH payments aren’t instant. While they are secure, you may experience a delay of a few days before the money leaves your account and reaches the construction company. If need the payment to be processed quickly, the wait time might be a little frustrating.

Some payment methods that are gaining ground that you should consider is using Venmo or other digital wallets, which can be a very convenient way to handle smaller or medium-sized projects. These are options that simply were not available even 10 years ago, but If you’re tech-savvy and already use these platforms, you might appreciate how easy it is to make a payment directly from your phone or device. 

These funds are typically transferred instantly, which means no delays, and you don’t have to worry about writing checks or carrying cash. However, as you may be aware Venmo and other platforms often come with limits on how much you can transfer in a single transaction. This can make them less suitable if you're looking to use them for large-scale construction projects where payments can be sizable. Additionally, some companies may charge a small fee for using these digital payment methods, which could add to your costs.

Paying for a large construction project outright just isn’t feasible. In these cases, third-party financing options can help get the work done without draining your savings or maxing out your credit cards. We also see where homeowners will use a third-party option to help supplement the additional costs that they may or may not have in savings. 

With the dramatic rise in home values over the last 10 years, A HELOC loan may be the way to go to fund your current and future projects you have on the short list. A HELOC loan allows you to borrow against the equity in your home, giving you a flexible line of credit that you can draw from as needed during your construction project. One of the major benefits of this type of financing is that HELOCs often come with lower interest rates compared to personal loans or credit cards, making them an attractive option if you’re financing a significant project. 

You can also borrow only what you need, and only when you need it, which helps keep your interest payments lower. However, it’s important to remember that a HELOC uses your home as collateral. This means if you fail to make payments, you could risk losing your home. Additionally, if property values in your area decline, the amount of equity you have available to borrow may decrease.

Construction loans are short-term loans which can be “same as cash” loans, or lower monthly interest rate loans specifically designed to fund the building or renovation of a property.  The construction industry has a lot of lending companies se up to make this process as simple as possible, with approvals as quickly as just a couple mins. These loans are typically disbursed in draws based on the progress of the construction work. One of the advantages of a construction loan is that it allows you to finance your project without tapping into your savings or home equity. 

On the downside, most construction finance lenders charge the contractor to use their platform which can add anywhere from 5% - 10% more to cost of the job in financing charges. While they can be easy to obtain, and find a project they can add significant costs to a “financed price”, rather than the ”cash price”, for the same job, as you may have to pay the percentage the contract is charged and the interest that the lender is charging you on the money being spent. 

In addition to deciding how to pay, you'll also need to consider when and how often you will have to pay. Depending on the size and complexity of your project, the payment schedule can vary pretty significantly. 

For shingle roof Replacement projects or window replacement jobs, or even smaller projects that can be completed quickly, such as a home repair or minor renovation, you’ll likely encounter a simple payment structure. Typically, you’ll be asked to provide a deposit before work begins, usually ranging from 40% to 50% of the total project cost. Since there's a large portion of the overall job costs are in the materials to order and purchase it makes more sense that a large portion of the job would be required upfront to place the order and purchase the materials for the customer. This larger deposit helps cover not only materials or special ordered items, but also can secure your place in the contractor’s schedule. Once the work is complete, you’ll make the final payment. This straightforward approach is ideal for short-term projects where the financial commitment isn’t overwhelming and you can quickly see the results.

For medium-sized or more complex projects, the payment structure might be divided into several stages. You’ll typically pay a deposit of around 20-30% of the project cost upfront, followed by a series of progress payments as the work reaches certain milestones. For example, you might make a payment when the foundation is poured, another when the framing is complete, and additional payments as major components of the job are finished. This method allows you to keep track of the project’s progress and ensures that your payments align with the work being completed. It also helps you manage your budget by spreading out payments throughout the project, rather than needing to pay a large lump sum upfront or at completion. It's customary to see the final payment on these types of projects ending up being 5-10% of the overall project cost, paid once the project is completely finished.

For very large or custom projects, such as building a new home or completing a large-scale renovation, you may encounter an even more detailed payment schedule. These projects can involve 5-10 draws throughout the construction process, with payments tied to inspections or other significant milestones. Typically, a small portion of the total cost—around 5-10%—is held back until the project is fully completed and you’re satisfied with the work. This ensures that the contractor addresses any final details or issues before the full payment is made. For you, this can offer peace of mind, knowing that you still have some financial leverage until the project meets your expectations.

At New Beginnings Construction, we like our payment structures to mirror the expenses of the job. So we don’t bill the client too far ahead of the costs, nor are we comfortable shouldering much of the costs for the customer. There is a fine balance between the two that we think is fair to both the contractor and the client. 

When planning your construction project, choosing the right payment method and schedule is key to managing your finances and ensuring a smooth experience for all. Whether you prefer the ease of digital wallets, the structure of check payments, or the flexibility of a HELOC, understanding your options will help you stay in control of your budget while ensuring that your project progresses smoothly. By selecting the right payment method and schedule, you can make the construction process easier and more manageable, all while ensuring that your financial plan works for you.