What's Hot

    What Can You Trust?

    May 7, 2025

    Build a Safer Jobsite with AI and Cameras

    May 7, 2025

    Women in Construction: PPE

    May 6, 2025
    Get your Copy Today
    Facebook Twitter Instagram
    Facebook Twitter Instagram
    Connected WorldConnected World
    • SPM
    • Sustainability
    • Projects
    • Technology
    • Constructech
    • Awards
      • Top Products
      • Profiles
    • Living Lab
    Connected WorldConnected World
    Home»Thought Leadership»How Cashflow Is Crucial to Solving Construction’s Labor Woes
    Thought Leadership

    How Cashflow Is Crucial to Solving Construction’s Labor Woes

    No Comments3 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
    Share
    Facebook Twitter LinkedIn WhatsApp Pinterest Email

    Restricted flow of cash within the construction industry has had a domino effect, making it difficult for contractors to fund new jobs or pay their employees promptly. Learn how non-bank, non-debt capital for contractors and their subcontractors helps to address these problems.

    General contractors know it all too well: In 2023, construction labor demand has far outstripped supply. The latest data from CBRE shows the construction labor force has shrunk throughout the last year, while unemployment continues to rise. This in spite of construction wages actually increasing 9% since late 2020.

    Subcontractors are struggling to meet the needs of their GC customers, and cashflow has a lot to do with it—subs cannot bring more labor and other resources to bear on the GC’s jobs, because too much of their cash is tied up in working capital, specifically accounts receivable.

    For many of these subcontractors, payment terms have stretched as far out as 180 days.

    Looming over the industry is continued uncertainty in the banking sector, driven by the failures of Silicon Valley Bank and Signature Bank. Capital for the construction industry is becoming less readily available.

    At Raistone, our construction clients all tell a similar story of cash concerns and resource constraints. Having spent decades working in the world of construction finance, I propose a better alternative.

    We at Raistone specialize in providing non-bank, non-debt capital to both general contractors and subcontractors. We finance billions of dollars in working capital annually, enabling contractors to get paid early on invoices due to them.

    For general contractors who run an Early Pay program for their subcontractors, it is easier to attract scarce resources and labor to jobsites because the work can be quickly converted to cash. GCs that aren’t running an SCF program in 2023 are missing out on the opportunity to attract the best subcontractors, reduce project schedule risk and, with more financially robust subcontractors, reduce sub default risk.

    GCs that aren’t running an SCF program in 2023 are missing out on the opportunity to attract the best subcontractors, reduce project schedule risk and, with more financially robust subcontractors, reduce sub default risk.

    Consider this: With the ongoing resource shortage, the best subcontractors are going to have their pick of jobsites to work on. If a subcontractor with 100 employees can have their invoice paid immediately upon completion of their work for a month (under the GC’s Early Pay program), rather than waiting months to be reimbursed by a GC that does not offer early payment, the project with Early Pay is immediately going to become the more appealing option. The Early Pay GC becomes a preferred partner to their subcontractors, which translates to reduced project schedule risk, subcontractors in a stronger financial position, and more/better bids for subcontracts.

    When subcontractors are provided cash they can spend now, they’re able to submit more competitive bids and win more/bigger jobs. Early Pay can directly address the disparity between construction resource supply and demand, ensuring that contractors of all sizes can afford to work on the jobs they want.

    Visit raistone.com/construction and get in touch with our team of construction finance experts, and learn how Raistone can help you access the cash you need to build your business.

    About the Author

    Mike Bruynesteyn is the Chief Financial Officer of Raistone, bringing extensive financial expertise from his previous roles at Turner Construction Company, at General Motors, in portfolio management, and in investment banking.

    construction@raistone.com

    5G AI Business Finance Cash Flow Construction Industry Cash Flow Management Cash Flow Management Construction Industry Cloud Construction Construction Finance Construction Funding Construction Industry Digital Transformation Early Pay Construction Edge Finance Future of Work IoT Non-Debt Capital Raistone Sustainability Working Capital Working Capital for the Construction Industry
    Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email

    Related Posts

    What Can You Trust?

    May 7, 2025

    Build a Safer Jobsite with AI and Cameras

    May 7, 2025

    Women in Construction: PPE

    May 6, 2025

    Success Stories: Customized Sensors for Wildfire Prevention

    May 5, 2025

    The Rise of Prefab

    May 1, 2025

    Why Construction Forecasting Still Happens in Spreadsheets & What to Do about It

    May 1, 2025
    Add A Comment

    Comments are closed.

    Get Your Copy Today
    2025 ASCE REPORT CARD FOR AMERICA’S INFRASTRUCTURE
    https://youtu.be/HyDCmQg6zPk
    ABOUT US

    Connected World works to expand quality of life and influence a sustainable future through digital transformation, innovation, and create opportunities all around.

    We’re accepting new partnerships and radio guests right now.

    Email Us: info@specialtypub.com

    4611 Hard Scrabble Road
    Suite 109-276
    Columbia, SC  29229

     

    Our Picks
    • What Can You Trust?
    • Build a Safer Jobsite with AI and Cameras
    • Women in Construction: PPE
    Specialty Publishing Media

    Questions? Please contact us at info@connectedworld.com

    Press Room

    Privacy Policy

    Media Kit – Connected World/Peggy Smedley Show

    Media Kit – Constructech

    Facebook Twitter Instagram YouTube LinkedIn
    © 2025 Connected World.

    Type above and press Enter to search. Press Esc to cancel.