Chipi enables Small and minority construction businesses to bypass financing and capitalization limits by enabling them to access the capital of the project developer

Lower the Costs and Risks of your Subcontractors

A new SaaS-enabled workflow that provides early access of your bank lines to your subcontractors during materials procurement

Workforce Growth

Cash Flow Solution

Risk Solution

Eliminate cash flow pressures and the need for expensive external financing

Minimize risk initated by poorly capitalized and poorly financed subcontractors

Attract, grow, and diversify your workforce

Eliminate financial barriers for small businesses

Mitigate performance risks from small subs

Cash Flow Solution

Eliminate financial barriers for UBE’s & SBE’s

Workforce Equity

Eliminate financial barriers for small businesses

Risk Solution

Mitigate performance risks from small subs

Typical progress payments can be easily broken into smaller amounts that can better track needs of your subcontractors

These small payments can be pre-programmed with release rules and approvals, well in advance

This release of funding is point-to-point, bypassing all intermediaries, which eliminates misuse risks

That means this funds flow automation closes the timing gap between cash needs and cash payments

For example, construction materials are paid upon delivery directly to the supplier

This eliminates the need for deep external financing by solving the underlying problem – negative cash flow

“Internalizing” the funding needs of your team creates a much better-capitalized project ecosystem

by eliminating the main culprit that disrupts efficiency and limits production capacity

Finally, you are removing the main barriers for participations by smaller subs and suppliers – large amounts of capitalization and deep financing options

Summary of Main Features

Internal Funding Replaces External Financing

Funding versus Financing?

Funding is usually sourced from an “internal” non-financial entity and may not have a cost or require repayment. Internal entities are part of your value chain.

Financing is always sourced from an external financial entity and includes both cost and repayment.

Internal Funding Replaces External Financing

Funding versus Financing?

Funding is usually sourced from an “internal” non-financial entity and may not have a cost or require repayment. Internal entities are part of your value chain.

Financing is always sourced from an external financial entity and includes both cost and repayment.

Payments Bypass Intermediaries

Construction payments are made directly between the project funder and the financial beneficiary bypassing all typical intermediaries

Fractionalize Payments Meet Cash Flow Needs of Subs & Suppliers

Construction payment size and timing matches cash flow needs of small businesses

Fractionalize Payments Meet Cash Flow Needs of Subs & Suppliers

Cash Flow Solution

for small construction businesses

Eliminate the most common and largest challenge for SBE’s – cash flow availability

Chipi Impact on cash flow volatility and maximum negative cash flow needs during construction

Risk Solution

for Developers, GC’s, and Tier 1 Subs

Mitigate challenges faced by small subcontractors that introduce risk

Undercapitalization Creates Risks for Projects

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

Workforce Growth & Equity

to attract, grow, and diversify your workforce

Small subcontractors can bypass limited capital and financing access while freely adding production capacity

Capitalization of Traditional Small Business is dependent upon credit cards and trade credit both of which are expensive and limits company size and growth

Capitalization of construction subcontractors and materials suppliers INCREASES GREATLY so that they can access in-kind capital to expand production capacity and grow business operations

Payment Fractionalization Maintains Financial Alignment

Holding 100% of Payment is an Unnecessary Amount of Leverage and Creates More Serious Risks such as Operating Failures

Typical Invoice represents 100% payment risk to subcontractors and materials suppliers creating cash flow problems and introduces project risks

$Invoice risk after fractionalized payments$

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.

The application is easy to use and can be applied to any funding approval process

API is available for ERP and accounting integration

API Integration

Integrate into your existing technology stack. Request our API’s to integrate into your ERP, payment application, or draw control systems

Alleviating Financing Challenges will Attract Top Subcontractors and Suppliers

Bank your own project and see how it can change productivity and workforce diversity

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