American Express and Billd Partnership: Transforming Construction Payment Dynamics

Construction is one of the pillars of global economic development but not without its unique challenges. Most of these complexities manifest in unpredictable pay cycles and high upfront costs. With such financial dynamics, construction contractors have long been counseled to scale and grow heavily on maintenance and operations. As such, American Express (Amex) partnered with Billd, a premier construction financial services provider in America, to create solutions addressing the construction ecosystem. This partnership allows eligible American Express merchants to input their commercial contractor customers into Billd's network and provide them access to extended payment terms and other financial products. Contractors can access payment terms extending up to 120 days on material purchases. Such arrangements can allow construction businesses to align expenses with their project payment cycles which would help create cash management efficiency and operational excellence.

The Challenges Facing the Construction Industry

Construction enterprises inhabit a unique financial ecosystem. Payment delays routinely occur, often averaging an additional 57 days. These manual payment processes aggravate matters even further. Typically, contractors observe the burden of upfront labor and material costs, resulting in a straining of working capital and limited larger project take-on ability. On the other hand, equipment trader persons and suppliers suffer from delayed payments that affect their operations and financial stability. This gets compounded with the analog operational processes of the industry. Manual workflows, composite payment systems, and dissimilar terms of payment all lead to inefficiencies and challenges that discourage working in a very competitive business environment. In the worst-case scenarios, these aspects leave a very highly required need for streamlining and digitalizing financial solutions in the construction industry's unique context.

Amex and Billd: A Partnership Rooted in Innovation

American Express has partnered with Billd to extend its commitment to merchants in the construction space by offering contemporary, suitable financial solutions to this segment of the industry. Billd offers underwriting for commercial contractors for payment terms extending up to 120 days against eligible material purchases. The purpose here is to ensure meaningful facilitation of payment flexibility for contractors, empowering them to navigate the landscape of their business with a firmer resolution. “The construction industry contributes to the success of many other industries and communities. And construction right now is facing unique challenges, which calls for unique solutions," said R.J. Ancona, Vice President and General Manager of B2B Product, Partnership & Client Management, American Express Merchant Services.“To help address payment delays, American Express is working with Billd to provide customers of eligible merchants with access to extended payment terms.”

Key Benefits of the Amex and Billd Partnership

Extended Payment Terms

For the first time, contractors can buy materials on credit for up to 120 days. This flexibility enables them to control their expenses and pay for the purchases coordinated with the project, which decreases the financial pressure.

Improved Cash Flow

Deferred material costs allow contractors to keep cash on hand for labor, and other operational requirements. It increases their cash flow, so they can invest in expansion prospects and do bigger projects.

Increased Supplier Relationships

The upfront payments made by Billd to suppliers reduce their financial risks and provide a basis for trust in the construction industry. Contractors are also looking into getting cash discounts on materials, to increase their cost-cutting strategies.

How It Works

The process of leveraging Billd’s extended payment terms is straightforward and designed to minimize administrative burdens:

Project Enrollment

To use Billd, contractors first register their project, then send Billd a copy of their contract with either the general contractor or the owner. This helps obtain a review to define what the project requires and its scope.

Material Quote Submission

When contractors work with Billd, they provide the company with a material quote from their usual provider. Contractors get to work with suppliers they already trust while taking advantage of Billd’s financial services.

Supplier Payment

Billd immediately pays the supplier once it gets the approval, so the materials are delivered as planned. With the help of this approach, Billd avoids late payments and lets contractors get started right away.

Material Delivery

The supplier sends direct deliveries to the work site, helping simplify operations and solve transportation issues.

Repayment

Contractors must pay Billd back within the specified term of 120 days. The repayment system matches project money flow, easing strain on contractors' finances during project start-up.

Industry Impact

Teamwork between Amex and Billd brings vital improvements to how construction projects get done. This collaboration helps solve contractors' and suppliers' ongoing financial problems, which makes business easier for everyone. Contractors submit bids with confidence for bigger jobs because Billd backs them with the cash to cover their materials expenses. On-time payments help suppliers improve their operating operational and financial situation. This link between contractors and suppliers helps everyone succeed better in the construction market while fixing payment problems.

A Broader Trend of Industry-Specific Solutions

The Amex and Billd collaboration fits into a growing pattern where banks and other financial companies work with specific service groups to build better options for their customers. In industries like construction, where they face special work issues, linking up with businesses like Amex and Billd becomes vital for them to run better and grow. Construction companies can make their operations run efficiently by adding digital-first financial services, and help staff keep their focus on key projects instead of paperwork. Because construction is growing and changing, companies that want to stand out need to accept new ways of doing business from Amex and Billd.

A Vision for the Future

“Billd is excited to partner with American Express on this collaborative effort to help eligible commercial contractors obtain material financing,” said Chris Doyle, CEO of Billd. “Together, we can offer a financial solution that allows merchants to receive quick payments while providing commercial contractors with a working capital option that helps mitigate the unpredictable payment timelines in the construction industry.”

As the construction industry keeps growing and transforming through new and effective ways, this partnership shows why businesses need to work together and try new ideas. Amex and Billd help construction grow stronger by giving their business partners the support they need to stay competitive and have a strong reputation.

Final Note

American Express and Billd teamed up and brought effective changes to the construction industry. Together, American Express and Billd make it simpler for contractors and suppliers by solving payment problems and creating financial tools for them. This way the construction industry gains major advantages, contractors handle bigger projects and suppliers get their money in a timely way. Construction companies that want to upgrade their operations and have sufficient growth need to adopt Billd and Amex's fresh solutions today. Companies can build their future business by using long payment periods and digital methods, freeing themselves from traditional payment problems.