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

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

Chipi Impact cash flow volatility and maximum negative cash flow needs

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

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 can access much greater amounts of in-kind capital to expand production capacity and grow business

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

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.

 

Pre-lien and mechanics liens from suppliers are eliminated

Alleviating Financing Challenges will Attract Top Subcontractors and Suppliers

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