Billd, a provider of material financing for commercial subcontractors, has launched of a new product aimed at improving cash flow for subcontractors and facilitating more timely payments for labor, called Pay App Advance.
Pay App Advance is designed to combat rising labor costs in the construction industry and the impact it’s had on subcontractor cash flow and overall liquidity of commercial construction projects.
Pay App Advance is the next step in Billd’s mission to provide subcontractors access to working capital needed to grow their business. The new product 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.
“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,” says 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.”
Billd has taken steps to provide financing terms that align with payment cycles in the construction industry. 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 2020, material and labor costs have increased, 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.
“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,” says Derek Mateos, president of Matcon Construction of Tampa, Fla. “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.”
