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The construction payment cycle is broken | Finance Friday

Built with Billd

English - December 17, 2021 10:00 - 4 minutes - 5.72 MB
Management Business Education commercialrealestate construction constructioneducation constructionfinancing contractors funding materialpurchasing materialsuppliers purchasingterms subcontractors Homepage Download Google Podcasts Overcast Castro Pocket Casts RSS feed
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The construction industry has failed subcontractors. Why?


Contractors are acting like a bank and floating money for somebody else's project, but not getting paid back for it for roughy 90 days.


Except unlike a bank, you’re probably not charging interest on your money.


If you’re not paid for 90 days and then 10% retainage is withheld, your entire profit margin may be held for up to two years, depending on the size of the project.


Luckily, there are things you can do to combat this.