One Stop Mortgage Corp Blog

4 Challenges Faced By Sub-Contractors During a Recession

August 28, 2015

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Imagine bringing in a healthy pay-cheque every two weeks from a steady employer while also having the flexibility to find work elsewhere. 

You’re a contractor.

Plenty of Canadians work as contractors in various sectors. Carpenters, cabinet makers, plumbers, electricians - most people who build new homes or work on home renovations have worked as contractors at some point in their careers. Tradespeople working in the oil and gas industry enjoy the flexibility of sub-contracting because the future is theirs to control.

Unless it’s not.

Sub-contractors are a significant portion of our business, and we’ve learned a lot about the pros and cons of the contractor’s life over the years.

It’s a challenging lifestyle, but done properly, it can be rewarding. The key is to understand the challenges and be prepared for them. Here are four challenges unique to the world of sub-contracting.


1. Qualifying for a Mortgage

Convincing the bank to lend you money to buy a new home when you don’t have guaranteed income is tricky. First, is your income every really guaranteed? You work hard for your money, but if you’re not protected by an employee’s rights, banks will hesitate to lend you the money you want, ditto for mortgage brokers. It’s easier for a bank to lend money to someone who’s employed, because it’s harder for them to lose their jobs. 


2. Finding Work

In the middle of an unstable oil and gas market, sometimes it’s tricky predicting where future work will come from. Now, what if that employer suddenly finds itself low on the funds it needs to keep you employed? Well, it’s a lot easier to cancel a contract then it is to fire an employee. Contractors are often the casualties of tightening budgets through no wrongdoing of their own. When the economy forces you out, it’s important to ask yourself the tough questions.

  1. Was there something I could have done better?
  2. Can I use this employer for a reference?
  3. What can I control moving forward?

3. Work/Life Balance

When the economy slides, some companies try to take advantage of lowered operating or labour costs. As a contractor, you’re probably used to work requests that pay well below your industry’s standard. When work is slow, you’d do well to accept anything that comes your way, right?

It’s a tough question. On the one hand, it’s probably a good idea to get while the getting is good, but if it interferes with your family or home life to a significant degree? There’s a balance to be struck. The life of a contractor is tough to balance, but it’s important to keep living while you’re searching for work.


4. Saving Money

A steady budget is your friend regardless of the financial climate’s temperature. Just because you saved money when work was plentiful doesn’t mean it’s the right time to start spending when work is slow. Who knows when things will rebound, after all? the price of oil doesn’t look like it’s going to rise significantly any time soon. Sticking to a budget is an annual practice, not one to alter month to month.

Saving money while you’re not bringing as much in might sound difficult, but it’s important to come out of the recession as financially healthy as possible. It can be done, just stick to your budget.


Are you a subcontractor having a tough time finding a lender? Sub-contracting is one of our specialties, call us today and we’ll figure it out together!

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