Cash Flow Solution
for Small Construction Businesses
Risk Solution
for Property Developers and GC’s

Property Developers Reduce Construction Risks by Extending Their Financing Scale to Fill the Cash Flow Challenges of Targeted Small Businesses
Activate Your SBE and DBE Hiring Goals at Scale
Gain a Competitive Advantage to Attract Subs
What we do: Chipi provides a technology workflow for approvals and payments that allows large Developers and General Contractors to insert their own funding into materials procurement and payroll thereby replacing and augmenting the financing and capitalization needs of small, underestimated, and underrepresented construction businesses.
Cash Flow Gaps for Subs Become Risks for Developers

Waterfall Construction Payments is a very slow process, particularly for those at the end-points, creating cash flow gaps.
Risks include payment risks, performance risks, schedule risks, and budget risks.


Cash Flow Gaps are Difficult & Expensive to Fill for Small Businesses

Credit availability is limited or unavailable for many. Subcontractors that are small or from underestimated groups are subject to barriers that create operational problems and limit production capacity.
Bonding, based on Financial Criteria, becomes a Challenge





Poorly Capitalized Subcontractors Introduce Schedule Delays
62%
Create Schedule Delays
Prequalified subcontractors introduced project delays with 80% of all subcontractors spending “a majority of the week” chasing payments.

Construction Payment Processes Create Risk and are a Barrier to Workforce Expansion

Top-down waterfall payments in combination with low capitalization and poor access to financing make entry into large construction ecosystems difficult and limits any available capacity
DBE’s and Small Businesses are Underbanked
Accessing financing is difficult. 59% of external financing requires a personal guarantee that can make business challenges devastating to livelihoods.
9%
Use External Financing
Small Construction Businesses have Low Cash Reserves
Majority-White businesses have 7x the cash buffer of Majority-Hispanic businesses and 13x the cash buffer of Majority-Black businesses.
20
Days Cash Buffer
20
Days Cash Buffer
Small Construction Businesses have Low Cash Reserves
Majority-White businesses have 7x the cash buffer of Majority-Hispanic businesses and 13x the cash buffer of Majority-Black businesses.
Failure Rates for Small Construction Businesses are High
Exit rates are 59% within 5 years and 73% within 10 years. DBE’s have even higher exit rates, masked by their inability to even enter construction ecosystems.
24%
Failure within 1 year
Days-Sales-Outstanding is High
The average DSO for subcontractors is 52 days but materials supplier purchases are completed 30 days ahead of invoicing leaving negative cash flow that approaches three months.
89
Days Sales Outstanding
89
Days Sales Outstanding
Days-Sales-Outstanding is High
The average DSO for subcontractors is 52 days but materials supplier purchases are completed 30 days ahead of invoicing leaving negative cash flow that approaches three months.
Large Gap in Business Equity by Race
Poor financial inclusion of Black and Hispanic Americans has created an unbreakable cycle where lower family wealth leads to lower business capitalization, poor opportunities, and poor profitability.
4x
White vs. Black Business Equity

Hub & Spoke Payments

“Direct-to-Final” Payments are Made by the Developer


Approvals and Workflows Remain Unchanged. Think of it as “Local Approvals, Express Payments”

Financing Barriers and Payment Speed Become Irrelevant

Developers In-Kind Capital Adds Production Capacity



Direct to Final Payments Triggers a Virtuous Cycle that Increases the Workforce and Diversity

Direct-to-final destination payments are the equivalent of 100% cash flow coverage for small businesses, which grows their revenue and profits, expands their bonding capacity, easily qualifies them for capital-intensive projects, attracts new small business entrants, and makes the workforce larger and more diverse
62%
of Project Delays are introduced by Poorly Capitalized Prequalified Subcontractors

Mitigate Schedule Risks
Liquidity scarcity creates chaos.
Subcontractor liquidity pressures manifest as project challenges in many ways.
For example, delaying materials orders until the very last moment is a technique by subs to save either cash or debt capacity.
This ordering delay risks delivery delays – a common reason schedules are missed.
Diversity, Equity, Inclusion
Use your financing scale for Social Equity
Attract and retain small subcontractors and suppliers from under-resourced communities by removing financing costs and barriers.
Deploying capital to enable financial inclusion fulfills your commitment to support small, diverse, disadvantaged, women-owned, minority-owned, and veteran-owned business enterprises.
Let’s change the world!


Diversity, Equity, Inclusion
Use your financing scale for Social Equity
Attract and retain small subcontractors and suppliers from under-resourced communities by removing financing costs and barriers.
Deploying capital to enable financial inclusion fulfills your commitment to support small, diverse, disadvantaged, women-owned, minority-owned, and veteran-owned business enterprises.
Let’s change the world!

Gain Visibility of Suppliers, Subcontractors, and Materials
The process is built around transparency. Strengthening your value chain enables you to build a relationship with otherwise unknown entities and people. Track and control against environmental (or ESG) goals for materials.
Gain Visibility of Suppliers, Subcontractors, and Materials
The process is built around transparency. Strengthening your value chain enables you to build a relationship with otherwise unknown entities and people. Track and control against environmental (or ESG) goals for materials.


Attract Top Contractors and Subcontractors
Your project is the most attractive. Eliminating financing barriers and costs makes your project more attractive than others still following payment dogma.
Capture Financial Waste
Lower your costs.
Inserting your funding into the materials purchasing process will capture the financing costs of materials suppliers that are embedded in their prices.


Capture Financial Waste
Lower your costs.
Inserting your funding into the materials purchasing process will capture the financing costs of materials suppliers that are embedded in their prices.
Easy to Use, Handles Every Approval Process
Approval requests can follow any path, at will, and can include as many people as needed.
Chipi can handle simple approval chains or very complex ones.


API Integration
Integrate into your existing technology stack. Request our API’s to integrate into your ERP, payment application, or draw control systems
Eliminate Lien Workflows and Risks
Eliminate Preliminary Notices and Lien Releases from suppliers. Chipi eliminates trade credit and hence the need for lien workflows or filings as it relates to suppliers.
During COVID’s initial outbreak, lien filings grew 40% demonstrating the sensitivity and vulnerability of construction finances.


Eliminate Lien Workflows and Risks
Eliminate Preliminary Notices and Lien Releases from suppliers. Chipi eliminates trade credit and hence the need for lien workflows or filings as it relates to suppliers.
During COVID’s initial outbreak, lien filings grew 40% demonstrating the sensitivity and vulnerability of construction finances.
Attract Top Subcontractors and Suppliers
Bank your own project and see how it can change productivity and workforce diversity