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

Programmable Payments

Fractionalized and frequent payments that are programmatically released to fill the cash flow gaps of your small construction businesses

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 UBE’s & SBE’s

Mitigate financial and production risks from SBE’s

Cash Flow Solution

Eliminate financial barriers for UBE’s & SBE’s

Workforce Equity

Attract, grow, and diversify your workforce

Risk Solution

Mitigate financial and production risks from SBE’s

Programmable payments enable the largest project entities – the developer, GC, or lender – to plan and then automatically release money in real-time based upon “confirmed completion”

Since programmable payments can be fractionalized and planned well in advance of materials delivery and labor production, final funds flow automation definitions can meet the operational needs of small businesses in real-time

So programmable payments dramatically speed up cash conversion cycles which also eliminates the need for external capital providers and high amounts of capital

This real-time funding creates a much better-capitalized project ecosystem that can maximize production capacity and efficiency

Finally, programmable payments expands and diversifies the available workforce by enabling small businesses to gain access to capital intensive projects by eliminating financial barriers experienced by most targeted small businesses

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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