NUMBER THREE – You can’t talk about payment conundrums without discussing the surety bond that assures a contractor will perform and pay their bills. Sureties are commonly involved with construction for government entities; especially larger entities and larger projects. Sureties usually charge a few percentage points to the contractor, which is passed straight through in a line item to the customer. Frequency of bonds being called upon is low but loss severity, when they are, is often quite high. Residential construction generally cannot get surety bonds due to the higher risk these projects pose. Many banks shy away from construction lending because the payment & performance risks are too high given the expense of thorough processes that are ultimately fallible. No matter who is at fault when a project fails it would be far easier to resolve if no money were in the possession of the wrong player. Every failure we’ve witnessed could have been avoided if the mostly-manual processes to assure payments were applied to work performed and materials procured were even a little more infallible.
What is BuildPay?
BuildPay uses financial technology that connects the entire payment chain, enabling fast, direct payments, quicker build times (encouraged by better payments), and better material pricing (made possible by guaranteed payments). Construction the way it should be. #GotPaid