Bill Browne (right) cuts lumber for interior walls for a new business office in a Wasilla mall. Subcontractor Robert Jeffries (background) helps on the job. Photo/Margaret Bauman/AJOC

The four independent small business owners, with little time to spare given their work schedule, were musing over the increased demand for their services in an economy that has left so many businesses in distress.

While the economy has prompted many to tighten their budgets, it has become a cloud with a silver lining for many engaged in the construction trades, brightened by a decline in the cost of materials.

"People are staying at home more," said Jefferies, whose specialty is installation of cabinets, countertops and flooring. People also entertain more at home, they don't eat out as much, and so are more willing to spend money to add to the ambiance of their homes, he said.

LaFay, a plumbing and heating specialist, said he's kept particularly busy doing winterization and plumbing repair work on foreclosed properties, as well as routine installation and furnace cleaning and other plumbing work.

On a recent call from a client concerned about a frozen pipe, which he quickly located, he referred the client to Brauneis, who arrived shortly after with space heaters. The pipe was thawed and the customer's water running smoothly in less than an hour.

"Referrals are leading to more referrals," said Browne, of Circle Ventures, a contractor specializing in home remodeling. Browne's workload that day included creating office space in a new mall for the local branch of a financial advisory firm.

Previous work for the same client, delivered on time and under budget, led to this latest job, for which Browne hired Jeffries to do the interior walls.

"As a general contractor, it's more feasible to hire a sub (contractor) than to add an employee," Browne said.

So Browne often hires on as subs Jeffries, owner of J&J Custom Interiors, Brauneis, owner of Sam's Carpet Care, and LaFay, owner of Meadow Lakes Supply Co.

Most of their business these days is referrals from satisfied customers and from other members of their local chapter of Business Networking International, the world's largest business networking organization.

"We all do good work and if people are happy, they're going to tell," Browne said.

Brauneis agreed. While he's cut back on advertising for reasons relating to the economy, he still has more business than usual at his firm, which offers carpet cleaning, installation of flooring and disaster repair work from flooding, fires and other such incidents.

"It's all referrals," said Brauneis. "When you do a good job, people tell their friends and co-workers."

Their good work notwithstanding, these independent contractors have benefited from a decline in the cost of construction materials, LaFay said. A huge demand for sheathing, siding and sheetrock in the aftermath of Hurricane Katrina drove upward the price of construction materials, but now those price jumps have subsided.

Another benefits is the availability of funds to do such repairs and remodeling, said Bobbie Rawcliffe, assistant vice president for the mortgage branch of Alaska USA Federal Credit Union in Palmer.

The strength of the credit union and the oversight of its finance committee allowed Alaska USA to prosper in difficult times, she said. Right now, "it's not that credit is tight," she said. "The borrower just has to prove ability to pay back the loan."

One of the best deals out there for consumers who want to stay in their current house is a Federal Housing Administration Title 1 loan, Rawcliffe said. The maximum available for such loans is $25,000 and the loan can be scheduled for up to 25 or 30 years, she said.

Home owners who plan to be out of their house in a couple of years can use a Title 1 loan to pay for a new roof, a new furnace, new carpeting and/or new appliances, for example, adding value to the home, and when it sells, pay the loan off, she said.

Another option is a home equity line of credit, which is a loan like a credit card. The client gets a line of equity and it is recorded as a second deed of trust on the house. The customer doesn't pay interest on that loan until the line of credit is issued.

Home equity lines of credit are by design, however, an adjustable rate product. Every month the minimum payment is 1.5 percent of the balance, but within that 1.5 percent more or less of that may go toward interest, as interest rates adjust, so it's probably not the most cost effective way, she said.

Whatever means of financing they are using, the customers are lining up for Browne, Jeffries, Brauneis and LaFay.

"Every day the phone rings, more and more," LaFay said.

"It started at Thanksgiving," said Brauneis, who is currently working six days a week, a minimum of 10-hour days. "I'm booked out until April with flooring and installs of carpet to total rebuilding of restorations. It's been more feasible for me to hire these guys than to add to my staff."

Browne is busy too. One customer wants an addition on his house and a new kitchen. Another wants to replace all the windows in a four-plex that she may want to sell, he said. Others are calling for new decks.

Browne said his job bids are always at the mid-level range, allowing clients to go cheaper or more expensive in their product selections. Most are sticking with the mid-level price range, he said.