Value Chain Funding
Economic Equity
Cash Flow Solution
Risk Solution
to develop, grow, and diversify the construction workforce
for small construction subcontractors and materials suppliers
that minimizes schedule delays from poorly capitalized subs
Economic Equity
to develop, grow, and diversify the construction workforce
Cash Flow Solution
for small construction subcontractors and materials suppliers
Risk Solution
that minimizes schedule delays from poorly capitalized subs
Sourcing funding from resources internal to construction value chains enables flows of funds efficiency which results in a financially stronger ecosystem that can maximize production capacity and promote financial inclusion
Funding versus Financing?
Funding is usually meant to support a specific purpose such as purchasing materials from an approved PO. Funding may not have a cost or require repayment.
Financing is usually meant to support a general purpose like cash flow needs (although something specific such as a piece of equipment is typically financed). Financing always has a cost and must be paid back.
Cash Flow Solution
for small construction businesses
Risk Solution
for Developers, GC’s, and Tier 1 Subs
Undercapitalization Creates Risks for Project
80% of all subcontractors spend “a majority of the week” chasing payments.
62%
Create Schedule Delays
DBE’s and Small Businesses are Underbanked
59% of external financing requires a personal guarantee
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
Construction Failure Rates 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
Materials purchases begin 30 days before the DSO clock starts means suppliers are even more compromised
52
Days Sales Outstanding
Economic Equity Solution
to develop, grow, and diversify your workforce
Small subcontractors and suppliers now have a reliable and fair financing mechanism that enables them to bypass financial constraints and freely add production capacity
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.
Alleviating Financing Challenges will Attract Top Subcontractors and Suppliers
Bank your own project and see how it can change productivity and workforce diversity