In a recent Foundation Software webinar, Jesse Weissburg, co-founder and Chief Commercial Officer at Billd, laid out a clear and practical roadmap to address one of construction’s most persistent issues: cash flow. Sharing insights from Billd’s 2025 National Subcontractor Market Report, the conversation centered around how proactive capital planning can directly improve profitability and long-term business resilience.
If you missed the conversation, we’ve got you covered. Here are the top takeaways from the webinar.
The Payment Chain in Construction Creates Unique Challenges for Managing Cash Flow
The average subcontractor waits 56 days to get paid after submitting an approved pay app. But subcontractors are still expected to meet their payment deadlines for labor and materials, which often have net 30 or net 45 terms. This mismatch forces subs to float significant costs up front, which can strain working capital, limit growth opportunities, and affect relationships with suppliers and GCs if not managed strategically.
“When you look at other industries, the cash flow gap we face in construction is pretty atypical. And to further complicate things, most subcontractors are working with five, 10, or more general contractors who all have different payment terms. So managing that 56 days to get paid; it’s not like it’s 56 days with every GC. It changes from GC to GC, which further complicates things,” Weissburg said.
The Funding Gap Is a Major Threat to Growth
The funding gap is the financial deficit between the expenses subcontractors need to cover, and how much capital they have at their disposal between readily available working capital and cash from their projects. It’s not a theoretical problem—it’s one of the biggest financial stressors subcontractors face.
And the impacts are serious:
- 43% of subs don’t have the working capital to cover unexpected costs according to the National Subcontractor Market Report
- Some owners resort to using personal savings or delaying supplier payments to bridge this funding gap
- 45% of suppliers penalize late payments by increasing material costs (up to 11% on average)
Strategic Bidding is Making Subcontractors More Profitable—and More Competitive
One of the most surprising stats in Billd’s market report: Subcontractors who include the cost of capital in their bids are 41% more profitable than those who don’t.
These subcontractors aren’t arbitrarily increasing their bid prices. By including the cost of capital—whether that’s the cost of using a bank line of credit, supplier terms, or material financing—in their estimating process, these subcontractors are accurately measuring their project costs and protecting their margins.
Using multiple forms of working capital—and accounting for these costs in their bids—allows subcontractors to pay suppliers on time (unlocking better material pricing and leading to a more competitive bid), have the confidence to bid on larger projects, and protect their most valuable form of capital: their cash.
Even in tight, low-bid markets, these subcontractors are competing effectively. They’re not padding a bid—they’re structuring it to reflect the real cost of doing business. With stronger supplier relationships and fewer jobsite delays due to material hold-ups, they’re often the best choice for the GC, even if they’re not the lowest bid.
A Diverse Capital Stack Protects Your Business
Weissburg emphasized that subs need to rethink how they deploy capital. Most use what they think are the cheapest option first—cash or a bank line of credit—but that’s not always the best strategy.
Instead, he recommends starting with the least flexible capital options like supplier terms or material financing, which preserves the most flexible option (cash) for more strategic or urgent needs like payroll or growth opportunities. This deployment strategy helps reduce risk and keeps more flexible options available for the business owner to use as they see fit.
“It’s really important to understand all the different tools at your disposal. What is the best use for each of those options based on where you’re at financially? Really think proactively rather than reactively about how you deploy your different sources of capital,” he said.
Preserving cash by using an option like material financing also allows subs to stay current with suppliers, unlock early pay discounts (often greater than 2%, sometimes up to 7%), and negotiate stronger pricing. That can create a compounding advantage—lower material costs, more competitive bids, and fewer cash flow challenges in the future.
Secure Capital Before You Need It
The best time to secure additional capital is before you need it. That’s a central theme of both Billd’s report and Weissburg’s advice: Banks and other financial partners are more willing to extend favorable terms and rates to subcontractors when they’re financially healthy and not in a tight spot.
Weissburg encourages subs to map out their working capital needs 30, 60, and 90 days in advance.
“The very first thing to do is figure out where you stand today from a working capital perspective. What are the options you have available in the business today? Where do you stand in terms of available capital and what is needed over the next 90 days? This may sound like an easy exercise, but the reality is that it isn’t. For example, you know you have retained earnings coming in, but you don’t know when exactly to expect them. You have a project that’s supposed to start in 30 days, but maybe it’s pushed out a little bit further. So the number one thing to do is figure out where you stand today and then determine what you need for the future.”
If you don’t have a CFO in-house, consider working with a fractional CFO or financial advisor to do this exercise. Understanding when and where you may hit capital bottlenecks is the first step to overcoming them.
No matter how long a subcontractor has been in business, the unfortunate reality is that cash flow issues aren’t going away—but with a proper strategy, they can be managed. The subcontractors who are winning right now are those who are taking a proactive approach: securing capital before they need it, negotiating supplier terms, accounting for the cost of capital into their bids, and protecting their most liquid capital options. If you’re looking to scale or create a more resilient business, now is the time to tighten up your capital strategy—and get ahead of the gap before it affects your bottom line.
