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
![Equity Enable social and economic equity](https://chipi.works/wp-content/uploads/2022/08/Equity.png)
![Cash Flow Challenges Eliminate cash flow pressures and the need for expensive external financing](https://chipi.works/wp-content/uploads/2022/08/Cash-Flow.png)
![Mitigate Risk Minimize risk initated by poorly capitalized and poorly financed subcontractors](https://chipi.works/wp-content/uploads/2022/08/Risk-No-fill.png)
Attract and grow smaller subcontractors
Eliminate financial barriers that limit capacity
Mitigate performance risks born of financial distress
Cash Flow Solution
![Cash Flow Challenges Eliminate cash flow pressures and the need for expensive external financing](https://chipi.works/wp-content/uploads/2022/08/Cash-Flow.png)
Attract and grow smaller subcontractors
Workforce Equity
![Equity Enable social and economic equity](https://chipi.works/wp-content/uploads/2022/08/Equity.png)
Eliminate financial barriers that limit capacity
Risk Solution
![Mitigate Risk Minimize risk initated by poorly capitalized and poorly financed subcontractors](https://chipi.works/wp-content/uploads/2022/08/Risk-No-fill.png)
Mitigate performance risks born of financial distress
![Down Arrow](https://chipi.works/wp-content/uploads/2022/07/Down-Arrow.png)
![Down Arrow](https://chipi.works/wp-content/uploads/2022/07/Down-Arrow.png)
Summary of Main Features
![Funding replace financing](https://chipi.works/wp-content/uploads/2022/11/Frame-155.png)
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.
![Funding replace financing](https://chipi.works/wp-content/uploads/2022/11/Frame-155.png)
Payments reach end-points without intermediary risks or delays
![Hub and spoke payment method Construction payments are made directly between the project funder and the financial beneficiary bypassing all typical intermediaries](https://chipi.works/wp-content/uploads/2022/11/Frame-154.png)
Smaller Programmable Payments Prevents Liquidity Risk
![Payment size and timing matches needs Construction payment size and timing matches cash flow needs of small businesses](https://chipi.works/wp-content/uploads/2022/11/Frame-156.png)
![Payment size and timing matches needs Construction payment size and timing matches cash flow needs of small businesses](https://chipi.works/wp-content/uploads/2022/11/Frame-156.png)
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
![Subcontractor Cash Flow Model Chipi Impact on cash flow volatility and maximum negative cash flow needs during construction](https://chipi.works/wp-content/uploads/2022/08/Subcontractor-Cash-Flow-Model.png)
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 Capitalization of Traditional Small Business is dependent upon credit cards and trade credit both of which are expensive and limits company size and growth](https://chipi.works/wp-content/uploads/2022/11/Frame-158-1.png)
![Capitalization of Small Business using Chipi 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](https://chipi.works/wp-content/uploads/2022/11/Frame-157.png)
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 Typical Invoice represents 100% payment risk to subcontractors and materials suppliers creating cash flow problems and introduces project risks](https://chipi.works/wp-content/uploads/2022/11/Frame-159.png)
![Invoice risk after fractionalized payments 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](https://chipi.works/wp-content/uploads/2022/11/Frame-160-1.png)
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.
![screen 3 The application is easy to use and can be applied to any funding approval process](https://chipi.works/wp-content/uploads/2021/03/screen-3.png)
![api 60 API is available for ERP and accounting integration](https://chipi.works/wp-content/uploads/2021/04/api-60.png)
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