Subcontractor market report reveals impact of accounting for working capital costs

Billd, a provider of financing solutions for commercial subcontractors, has released its 2024 National Subcontractor Market Report. The report, now in its fourth year, is based on a survey of nearly 700 construction professionals, with 85% being business owners and executives who have been in the industry for over a decade.

The report highlights a significant disparity in business outcomes between subcontractors who account for working capital costs and those who do not. According to the findings, 52% of subcontractors do not recuperate these costs despite incurring them. This practice has resulted in an average profit margin increase of 11% for those who do account for working capital costs compared to their peers.

A key issue identified in the report is the slow payment from general contractors (GCs) and property owners, with payment timelines averaging 57 days after pay application submission. This delay poses challenges to subcontractors' growth aspirations and necessitates leveraging various forms of working capital to sustain operations.

The report also indicates positive trends among subcontractors, with 67% experiencing revenue growth in 2023 and 41% seeing growth between 11-20%. Furthermore, 73% plan to expand their businesses in 2024. Those accounting for working capital costs reported better relationships with GCs and optimistic business growth projections for the coming year.

Chris Doyle, founder and CEO of Billd, stated: "It is our mission to empower subcontractors to do the best work of their lives. Our market report is focused on highlighting subcontractors’ biggest opportunities and challenges from the front lines of the commercial construction industry, and gives them the tools and strategies to maximize their success."

Billd aims to raise awareness about tailored financing options available to subcontractors while advocating for them within the industry.

For more details on Billd's payment options or to access the full report, visit www.billd.com/2024-market-report.