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

Circular Financing Solution

 SaaS workflow that enables developers or GC’s to recycle their available liquidity for use by smaller subcontractors

Workforce Growth

Cash Flow Solution

Risk Solution

Enable social and economic equity
Eliminate cash flow pressures and the need for expensive external financing
Minimize risk initated by poorly capitalized and poorly financed subcontractors

Attract and grow smaller subcontractors

Eliminate financial barriers that limit capacity

Mitigate performance risks born of financial distress

Cash Flow Solution

Eliminate cash flow pressures and the need for expensive external financing

Attract and grow smaller subcontractors

Workforce Equity

Enable social and economic equity

Eliminate financial barriers that limit capacity

Risk Solution

Minimize risk initated by poorly capitalized and poorly financed subcontractors

Mitigate performance risks born of financial distress

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 reach end-points without intermediary risks or delays

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

Smaller Programmable Payments Prevents Liquidity Risk

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

Smaller Programmable Payments Prevents Liquidity Risk

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

Circular Financing Enables SBE Capacity Growth

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
Chipi's Fractionalized Payment workflow with direct-to-final destination payments addresses cash flow problems of subcontractors while also maintaining ENOUGH invoice VALUE-AT-RISK to maintain financial alignment of incentives

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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