How to Collect Deposits as a Contractor (Without Chasing People)

You've signed the job. The client is excited. You schedule the start date, order materials, block out your calendar — and then the client goes dark. Or worse: you finish the work and they take 60 days to pay.

Every experienced contractor has a story like this. And most of them learned the same lesson the hard way: always collect a deposit before starting work.

Here's how to do it right — without feeling awkward and without chasing people.

How much should your deposit be?

The industry standard for residential contracting work is 25-50% upfront. Here's a general guide:

| Job Size | Recommended Deposit | |----------|-------------------| | Under $2,000 | 50% or payment in full | | $2,000 - $10,000 | 50% | | $10,000 - $50,000 | 25-33% | | Over $50,000 | 10-25% (or milestone payments) |

Why 50% works for most jobs: It covers your materials cost and shows the client is serious. If someone balks at 50%, they were going to be a problem client anyway.

Some states have laws limiting how much you can collect upfront (California caps it at $1,000 or 10%, whichever is greater, for home improvement contracts). Check your state's contractor licensing board.

When to ask for the deposit

The best time to ask is immediately after the client agrees to move forward. Not tomorrow. Not "whenever you get a chance." Right now.

Here's why timing matters:

• In the moment: Client is excited about the project. Emotional buy-in is at its peak. Signing and paying is easy.
• 24 hours later: They've had time to second-guess, price-shop, or just get busy with life. Every day you wait, the close rate drops.

The ideal flow looks like this:

1. Client says "looks good, let's do it"
2. You send the quote (or they already have it)
3. They sign the quote electronically
4. They pay the deposit via credit card
5. You confirm the start date

Steps 2-4 should happen in one session, one link, one flow. The fewer friction points, the higher your collection rate.

How to ask without being awkward

Most contractors feel weird asking for money upfront. Here's the thing: you're not asking. You're stating your standard business terms.

Bad: "Um, so I usually ask for a deposit before I start... would that be okay?"

Good: "Great, so the deposit is $4,000 which covers materials and gets you on the schedule. I'll send the quote to your phone right now — you can sign and pay from the link."

It's not a question. It's just how you do business. Confidence sells.

Payment methods (ranked by effectiveness)

1. Credit card (best)

Instant, convenient, done. The client taps their card number on their phone and you have the money. Yes, you pay 2.9% + $0.30 in processing fees, but that's the cost of getting paid immediately instead of chasing checks for weeks.

2. Bank transfer / Zelle

No processing fees, but requires the client to manually initiate the payment. Adds friction. Many clients will "send it later" and later becomes never.

3. Check

Works for older clients who prefer it. But you have to physically receive it, deposit it, and wait for it to clear. And checks bounce.

4. Cash

Fine for small jobs, but no paper trail. Hard to prove payment if there's ever a dispute. Not practical for deposits over $1,000.

The winner is credit card, every time. The processing fee pays for itself by eliminating the #1 reason contractors don't get paid: friction.

What if they won't pay the deposit?

This is actually a good filter. A client who refuses a standard deposit is telling you something:

• They don't have the budget for the project
• They've been burned before and don't trust contractors (red flag — they'll be difficult throughout)
• They're getting quotes from multiple people and aren't committed

It's okay to walk away from these. A job without a deposit is a liability, not an asset.

If a client pushes back, try: "I totally understand. The deposit covers materials so I can get everything ordered and get you on the schedule. It's standard for our projects."

If they still say no, move on. There are plenty of clients who pay upfront.

Automate the whole thing

The biggest barrier to collecting deposits isn't the client — it's the contractor. If your deposit process requires you to:

1. Send a PDF quote via email
2. Wait for them to print and sign it
3. Send a separate invoice for the deposit
4. Wait for a check in the mail

...then of course you're not collecting deposits consistently. The process is too painful.

The fix is to combine quoting, signing, and payment into one step. The client gets a link, reviews the quote, signs with their finger, and pays with a credit card — all in 60 seconds.

BidCraft does exactly this. You build the quote on your phone, set the deposit amount, and send it via text. The client handles the rest. You get notified when they sign and when the money hits your account.

Start collecting deposits today →