Labor costs in the construction industry are rising, and it’s impacting subcontractor cash flow and the overall liquidity of commercial construction projects. Billd, a provider of material financing for commercial subcontractors, launched a new product, Pay App Advance, to improve cash flow for subcontractors and facilitate more timely payments for labor.
“When we’re not paid on time, which can happen frequently, we’re required to come out of pocket for labor which can put an undue stress on the business,” said Derek Mateos, President of Matcon Construction of Tampa, Florida. “We’ve also felt the spike in labor costs, which adds to this challenge. Billd’s Pay App Advance has assisted in stabilizing cash flow and has been a great support tool for our recent success.”
Pay App Advance provides same-day financing to cover the cost of labor, eliminating the responsibility of the subcontractor to float their own capital to fund projects and pay their workforce. With the addition of Pay App Advance, Billd now provides commercial subcontractors with upfront access to financing for the two largest expenses on a project: materials and labor.
Billd has taken major strides in the construction industry to provide financing terms that align with payment cycles. Billd has financed several hundred million dollars of materials, lowering the liquidity risk that General Contractors and Developers face on major construction projects. Since April of 2020, material and labor costs have skyrocketed, forcing subcontractors to pay out of pocket to get projects underway, increasing overall project risk. According to one recent study by AGC, material prices have risen 27.8%, yet bid prices have only risen by 5.2% over that same period. This gap has compressed margins and put an even greater strain on subcontractors, further magnifying their need for more financing options.
“The powerful combination of our Material Financing product with Pay App Advance gives subcontractors the resources and purchasing power they need to not only remain liquid throughout the entire project, but also to take control of their cash flow and grow their business,” said Chris Doyle, CEO of Billd. “Unfortunately, reliable, trustworthy and efficient financing alternatives simply haven’t been available to help these crucial businesses navigate these enduring challenges.”
Have you checked out our YouTube page?
We have a ton video interviews and additional content on our YouTube page. Recently we debuted Power Forward! -- a collaboration with BayWa r.e. to discuss higher level industry topics as well as best practices / trends for running a solar business today.
Our longer running side project is The Pitch -- in which we have awkward discussions with solar manufacturers and suppliers about their new technology and ideas so that you don't have to. We've discusses everything from residential rail-less deck attaching and home solar financing to large-scale energy storage value stacking and utility-driven new home solar + storage microgrids.
We also post our Project of the Year announcements there! Interviews with this year's winners will be up starting the week of Nov. 8. Head there and subscribe today to stay on top of all this extra stuff.