{"id":30171,"date":"2025-04-27T16:06:06","date_gmt":"2025-04-27T23:06:06","guid":{"rendered":"https:\/\/essential.construction\/news\/cash-flow-problems-continue-to-plague-subcontractors-report\/"},"modified":"2025-04-27T16:06:06","modified_gmt":"2025-04-27T23:06:06","slug":"cash-flow-problems-continue-to-plague-subcontractors-report","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/cash-flow-problems-continue-to-plague-subcontractors-report\/","title":{"rendered":"Cash flow problems continue to plague subcontractors: report"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><\/p>\n<p>            <img decoding=\"async\" class=\"text-to-speech__button__icon\" src=\"https:\/\/www.constructiondive.com\/static\/images\/audio_icon.svg?482016190122\" alt=\"-\"><\/p>\n<p>        Listen to the article<br \/>\n        <span class=\"text-to-speech__button__audio-length\">3 min<\/span><br \/>\n    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"https:\/\/res.cloudinary.com\/dmgi9movl\/video\/upload\/q_1\/v1745501399\/news\/text_to_speech\/subcontractors-cash-flow-profit-payment_nmr9tq.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/contact\/\" target=\"_blank\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<h3 class=\"standard-heading\"><span><span><span><span><span>Dive Brief:\u00a0<\/span><\/span><\/span><\/span><\/span><\/h3>\n<ul>\n<li><span><span><span><span><span><span>There are stark divides between how builders manage their profit margins and how they retain available capital for sudden emergencies, according to a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.prnewswire.com\/news-releases\/2025-national-subcontractor-market-report-reveals-substantial-disparity-in-profit-among-subcontractors-302429593.html\" target=\"_blank\"><span><span><span><span><span><span><span><span>new report from Billd<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, a financial solutions firm for subcontractors.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>In its 2025 National Subcontractor Market Report, the company surveyed over 800 subcontractors, general contractors and suppliers of all sizes, according to a news release. In findings that Billd referred to as alarming, it revealed that 40% of subcontractors retain half to all of their profits in the business to fund operations, which limited reinvestment in growth.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Slow, unpredictable pay was a leading culprit of cash flow instability, according to the release, a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/schedules-and-payments-dominate-subcontractor-challenges\/514756\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>long-documented problem in the construction industry<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>. The report also found that general contractors believed payments occurred in 30 days after a pay application, but subcontractors waited 56 days on average.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<h3 class=\"standard-heading\"><span><span><span><span><span>Dive Insight:\u00a0<\/span><\/span><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>In addition to the payment issues, subcontractors are also victims of what the report calls the funding gap. Results showed that 43% of subcontractors report not having enough working capital to cover unexpected expenses or project delays, according to the report.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Beyond that, 41% of subcontractors making more than $15 million in revenue seek more working capital before they need it. But that means a majority \u2014 59% \u2014 don&#8217;t, so they are not prepared when they suddenly need money.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>This can have a dangerous knock-on effect for businesses. Nearly a third of builders \u2014 29% \u2014 said overdue invoices get in the way of progress or success on their projects, and 35% said they pick and choose which invoices to pay on time.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Cash flow problems have also been the focus of previous reports \u2014 both the <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/cash-flow-problems-could-hinder-subcontractors-growth-report\/600499\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>2021<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> and <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/subcontractors-spent-97b-more-planned-2022-economy-materials\/648278\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>2023<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> iterations of Billd\u2019s surveys, for example, noted that this issue can stymie contractor growth and profitability.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>The report\u2019s authors offered three solutions for subcontractors to help protect themselves from cash flow issues:<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li><span><span><span><span><span><span>Use construction-specific financing.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Accurately calculate the cost of working capital.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Account for the cost of working capital in bids and change orders.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span><span><span><span><span><span>These methods have tangible benefits, the report claimed. In 2024, subcontractors who accounted for working capital costs in bids had a 24% profit margin, compared to a 17% profit margin for those firms that didn\u2019t account for these costs.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cThe data is clear \u2014 there&#8217;s a fundamental flaw in how money moves through construction,&#8221; said Chris Doyle, Billd\u2019s CEO, in the news release.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/subcontractors-cash-flow-profit-payment\/746232\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Listen to the article 3 min This audio is auto-generated. Please let us know if you have feedback. Dive &#8230; <a title=\"Cash flow problems continue to plague subcontractors: report\" class=\"read-more\" href=\"https:\/\/essential.construction\/news\/cash-flow-problems-continue-to-plague-subcontractors-report\/\" aria-label=\"Read more about Cash flow problems continue to plague subcontractors: report\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[],"class_list":["post-30171","post","type-post","status-publish","format-standard","hentry","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/30171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=30171"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/30171\/revisions"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=30171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=30171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=30171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}