Wall and ceiling contractors may not see the need to use a credit application when proposals and contracts can suffice, but they can actually speed up business if used properly. 

In this video, Thea Dudley, the CEO of Pocket Protectors known as the “Credit Overlord,” discusses the positive impact credit applications can have when used by subcontractors.  

“What I hear from them all the time is, ‘I don't really need a credit application, I've got a proposal and we're contract-based,’” she said. “I think that's great and those cover a lot of things, but it doesn't really tell you who you're doing business with.” 

Credit applications can also serve as a tool for subcontractors who aren’t receiving timely payments, which a recent survey pointed out as a main reason subcontractors are spending an extra $97 billion on labor and materials. 

“Sometimes the money gets a little stickier and they want to start shaving some things off. And so those back charges start coming up. So everything is a change order – ‘Don't, don't do this. We had a gentleman's agreement and the parking lot,’” Dudley said. “You want to make sure that's all really documented so that you can protect that cash flow for yourself.” 

To that end, Dudley said even when signing a contract, subcontractors should view themselves as a “bank” in the form of loaning money via labor and materials. In the video, Dudley offers a key piece of advice for when subcontractors run into issues with general contractors after filing a credit application.