The construction industry is plagued with conflict, risk and low margins. It’s a sad reality that the sector is riddled with a knock on effect of insolvency - when big players go bankrupt, smaller contractors often get knocked out to never return.
New methods of risk mitigation for construction entrepreneurs’ are essential for the industry’s ability to put an end to continued bankruptcies.
Unlike most industries, the construction industry often requires heavy upfront investments into building materials and expensive machinery long before the ground is broken on a building site. There’s a lot of risk work involved.
Despite a healthy building sector being a vital indicator of a country's prosperity, each project requires high investment risk in relation to the value of the companies’ assets which is what often causes the demise of successful firms. It also makes the industry very susceptible to failure in uncertain economic times like we’re currently facing.
Let’s take a look at some grim reports that have been published recently.
Construction companies rarely get to invoice their customers before certain, clearly defined construction phases are completed and approved. Any mistake, mishap or delay can lead to insolvency for the construction company and result in the site being halted for an unforeseeable amount of time.
As a result, a culture of construction companies relying on readily available credit provided by builder's merchants and suppliers has developed. But recent world-events and material shortages have put a squeeze on available credit.
We are already experiencing the first signs of construction companies folding due to unforeseen circumstances and a lack of working capital to keep them afloat.
The challenge with a lack of working capital is a big problem, and certainly one that should be avoided. The adoption of risk mitigation technologies are an opportunity for construction businesses to tackle working capital problems and use the opportunity for growth.
Buildbite understands the challenges construction companies face every single day and we are already helping to improve efficiency and profitability with our award-winning mobile application.
This year, we are taking the next step by providing in-app project financing services for construction companies. By embedding financial services like lines-of-credit we give Buildbite's customers a lifeline to carry them over challenging times.
Unlike traditional over-the-counter credit, Buildbite only works with trustworthy credit providers. Ensuring that the credit is allocated to customer approved projects and only released in accordance with the completion of predetermined project phases.
We take this responsibility seriously, requiring customers to go through a process of strong authentication. All completed tasks need a customer approval prior to allocating a line-of-credit to the project.
For credit providers, this offers a unique opportunity to dramatically lower their cost of customer acquisition to a mere fraction of what it is today and to reduce credit risks furthermore.
The embedded nature of financial services allows for repeat transactions between construction companies and credit providers.
Buildbite's primary role is to provide you with the tools needed to manage projects successfully and ensure that the collaboration between all stakeholders is seamless, transparent and trustworthy.
We’re eager to change the face of the industry and help construction entrepreneurs’ succeed with effective methods of risk mitigation. Contact us to find out more.
.svg){kind=small}
