Working capital management is critical to businesses, and yet many small and medium-sized enterprises (SMEs) - including subcontractors in the construction industry - cite the lack of access to affordable working capital as a key challenge to their growth and success.
For construction subcontractors, working capital challenges arise from several factors, including:
In a new white paper, Textura explores this challenging landscape and looks at how supply chain finance (SCF) can address these issues by changing the flow of funds in construction payments - to the mutual benefit of general contractors and subcontractors. Supply chain finance, which for years has proven successful in improving working capital access in sectors such as manufacturing and automotive, is now being used in construction to facilitate significantly earlier payments to subcontractors via third-party funding sources. The faster, more predictable payments enabled by supply chain finance can reduce days sales outstanding (DSO) for subcontractors, improving cash flow and working capital management.
The white paper, “Supply Chain Finance in Construction: Solving the Working Capital Challenge,” provides insights on:
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