In recent years, we’ve seen an influx of new tools, software and support for the construction industry. But sometimes there’s a healthy reluctance among subcontractors before adopting new things. There’s a lot to consider: how will a new tool fit with the way you’re already running your business? Is now the best time to start implementing it, or should you wait?
Billd is one such tool that helps subcontractors, specifically with financing their project materials and getting paid for a project sooner. Timing, in particular, is a factor that can give you pause as to whether or not to adopt Billd. You might be mid-project. Maybe the projects you’re on are closing out soon. However, these healthy objections could be preventing you from leveraging a potentially game-changing tool.
In this article, we’ll explore why there’s rarely poor timing when it comes to adopting Billd, the considerations that might hold you back, how waiting can make you lose money, and how Billd provides unique support at just about every phase of a construction project. The infographic below is also a handy summary and visual aid regarding the different ways Billd can help, and it’s yours to keep, download and share if you want.
Table of Contents
1. How Billd Supports You During the Preconstruction Phase
Understandable Considerations You Might Have At This Stage
- The chaos of the preconstruction phase means you’re busy estimating jobs and submitting bids. With so much on your plate, integrating Billd falls down the priority list because you don’t feel like there’s an immediate need.
- The opposite can also be true. The preconstruction phase is often bloated, lasting for months. With so much time to kill before the project, you may not feel a sense of urgency about using Billd.
- You don’t have quotes from suppliers and you haven’t submitted any pay applications to a GC because you haven’t started your project yet.
What You Miss Out On When You Don’t Use Billd At This Stage
If you want to be smart about financing, the best thing you can do is to be proactive rather than reactive. The early preconstruction phase is one of the best times to exercise that proactivity. That’s because Billd is more helpful the earlier you adopt it, and here’s why:
- Bid on more jobs – By signing up sooner, your cash flow will improve sooner, which will allow your business to take on more and bigger projects. You also gain more flexibility with the GCs you’re working with. Using Billd will allow you to withstand slower payments, and work with more suppliers, while maintaining your businesses cash flow.
- Consultative services at your disposal – We’re more than a financial tool, we’re a partner to subs. Billd takes a consultative approach to lending. If you need advice on taking on government projects, reaching out to new GCs or finding new opportunities, we’ve got your back.
- The start of a long term partnership – Like credit card history, it pays to have a long track record of using financing responsibly. Billd’s goal is to help you with financing on a multi-year plan, so the sooner we can start, the better it is for you.
2. How Billd Supports You During the Procurement Phase
Understandable Considerations You Might Have At This Stage
- If you’re already in the process of procuring materials, throwing Billd into the mix could be tricky, since you’ve already allocated funds for the materials you intend to buy. You’ve probably already pinpointed the suppliers you want to work with as well, and may have began negotiations.
What You Miss Out On When You Don’t Use Billd At This Stage
- Greater negotiating power – There are few things more enticing to a supplier than a customer who wants to pay upfront and in cash. Supplier terms might be useful to the sub, but they draw out the payment timeline for the supplier. Customers who pay cash are more desirable to suppliers, and they often offer discounts to incentivize these kinds of purchases, and give preference on lead times to those who pay faster. Using Billd gives you that cash buying power to help negotiate with suppliers. We also work with any supplier you’d like to. There’s no Billd-backed list of favorites that we limit you to.
- 120-day Terms – If you opt not to work with Billd to buy your materials, more than likely, you’re not paying for those materials upfront; you’re financing them with supplier terms. By doing so, you unnecessarily reduce the amount of time you’ll have to pay back those materials. Suppliers usually offer 30 days, while Billd offers 4x that amount: 120 days.
- Defend yourself against long payment cycles – In Billd’s 2022 Subcontractor Industry Report, it was found that 78% of subcontractors wait more than 30 days to get paid by their GC after submitting a pay app. This underlines why 30-day supplier terms simply aren’t enough. That’s why it pays to be equipped and ready with a partner like Billd; a 120-day cushion should be more than enough to safeguard against any hiccups in the payment timeline.
- Adjust your credit limit – The more you use us, the higher we can establish your credit limit. If you have new projects coming up that require a higher credit limit, we can adjust it as necessary so that you can safeguard funds for future use.
3. How Billd Can Support You During the Construction Phase
Understandable Considerations You Might Have At This Stage
- If you’ve already purchased the materials you’re going to need on a project, then the reasonable objection is that you’re past the point when Billd could be applied at all.
- To that end, you may have already moved forward on terms with your supplier. Generally speaking, this is the more comfortable path for most subs, who are understandably less than thrilled by the idea of using financing, no matter how useful “good debt” may be.
- It’s likely that you’re dealing with the backward payment cycle of the construction industry. You already paid for all your materials; you have to pay your crew once a week. Yet, you’re still waiting on payment from the GC. This may force you to move funds from one job to another. Contractors across the country are dealing with these struggles. In fact, our in our 2022 Subcontractor Industry Report, we found that 78% of subcontractors wait more than 30 days to be paid AFTER submitting their pay applications.
What You’re Missing Out On By Not Using Billd At This Stage
- Cash discounts, in case more materials are needed – Under most circumstances, you may continue to purchase more materials as the project goes on, even if you’ve already purchased the initial batch. For situations like this, Billd can absolutely still help you with purchasing additional materials. As we discussed in the Procurement phase section, this will give you greater negotiating power with suppliers.
- Getting paid before payment delays ever set in – At this stage in the game, the reality of payment delays may be setting it. This is when subs may begin to realize that, despite what you hoped, you’re not going to get paid on time. Don’t get burned when you saw the flame coming. Entering into a partnership with Billd ahead of time allows you to leverage our Pay App Advance tool, so that you can get paid sooner, instead of waiting around for the GC to get their payment to you.
4. How Billd Can Support You When You’re Finishing a Project
The close of one project is just part of the lead time before the next one, and if anything, it’s one of the best times to start working with Billd. Tying up loose ends on a project may be the only holdup you have.
Even if you don’t have any more projects coming and you don’t know when your next project will be, you will inevitably have more projects in the future, even if not right away. As discussed, it’s better to be proactive about setting up Billd. Don’t wait until the last minute, when payments aren’t hitting and supplier invoices are due.
What Happens When You Leverage Billd At This Stage
- If you’re still waiting to be paid on your submitted pay apps for this project, Billd can help get you paid much faster with our Pay App Advance service.
- This is a great moment to take lessons learned from this project as you start getting set up for the next one. If you experienced difficulties with getting paid on time, or paying your suppliers on time, this can serve as a motivator to get situated with Billd.
- Billd will provide a higher credit limit than any bank or supplier can offer for your next job. This means you can start bidding on larger or more complex projects.
It’s normal to procrastinate on something you think isn’t an immediate need. But the hesitation can ultimately do more harm than good, if the tool you’re considering will change how you do business for the better. If you’re done waiting and ready to get started with Billd, visit billd.com/start-here/ to begin the process. A Billd representative will answer any question you have about the process to make the transition as smooth as possible.
