By, Billd staff
Billd’s 2025 National Subcontractor Market Report reveals subs with a strong capital strategy are more profitable, have stronger supplier relationships (and better pricing), and win more bids than their competitors.
Billd surveyed more than 800 construction professionals to produce the fifth annual National Subcontractor Market Report. The responses from this year’s survey highlight that while long-standing industry struggles are still present, subcontractors are becoming more resourceful in how they overcome them.
- Nearly two-thirds of subcontractors report being slow-paid by general contractors (64%)
- 75% percent of subcontractors come out of pocket to cover material costs and 86% come out of pocket for labor before they receive payment on a project
- The GCs surveyed in the report believe it only takes subcontractors 30 days to receive payment, while subcontractors report waiting 56 days on average for payment. That 26-day gap represents a financial burden for the businesses waiting for payment while still covering large upfront payments necessary for new projects.
“This year, the report sheds light on the disconnect between how GCs and subcontractors view the problem of slow pay in the industry,” said Chris Doyle, founder and CEO of Billd. “When polled, GCs put the average DSO at 30 days, while subcontractors report 56 days on average. More troubling is that subcontractors don’t know if payment will come on day 30 or day 56. The only thing predictable is that payment for subcontractor’s work is unpredictable. This forces them to take a new approach to working capital. Their best solution: a proactively planned capital strategy.”
The status quo within the industry has widespread repercussions on subcontracting businesses and owners’ personal finances. Nearly 3 out of 4 subcontracting business owners do not take monthly or quarterly profit distributions from their companies in addition to their salaries, and 30% of owners report dipping into personal savings to cover a cash deficit in their businesses.
But the biggest takeaway from the report? There’s a class of subcontractors who are finding ways to operate within the limitations of the industry. They are not only finding ways to maintain profitability, but they are also significantly outperforming their peers.
The key traits from these best-in-class subs? They employ a construction-savvy capital strategy that includes: proactively securing both diversity and capacity in their working capital options, using outside funding to bring stability to cash flow (instead of relying only on cash reserves) to predictably pay material invoices, and accounting for the cost of capital in bids. As a result, these subs are winning confidence in the eyes of their GCs by eliminating cash flow burdens and positioning themselves to take on larger, more complex projects.
The financial impacts from implementing these strategies are undeniable:
- Subs who account for the cost of capital in their bids are 41% more profitable than their counterparts who don’t account for the cost of capital, a drastic rise from the 11% increase in profitability reported in 2024.
- The survey results show that accounting for the cost of capital doesn’t have a negative effect on bid win rate. In fact, the report showcases the opposite: 32% of subcontractors who account for the cost of capital report winning half or more of their bids. By comparison, 19% of subs who don’t account for the cost of capital report winning bids half or more of the time.
- 81% of subcontractors report having supplier terms that are 45 days or less. However, subs wait 56 days on average to receive payment after submitting an approved pay application. For subs who pay out of terms, suppliers report increasing their unit costs by an average of 11%. This cost ultimately reflects in their bids, potentially making them less competitive.
“As the Champion of the Sub, Billd has made it our mission to shine a light on the severity of the problem and offer proof that there are solutions,” Chris said.
This year’s report also details:
- The widespread impact of payment delays and resulting cash flow deficits, including the fact only 57% of subcontractor business owners believe they have enough working capital to cover unexpected costs
- The strategies subcontractors are using right now to manage their capital and the risks associated with insufficient working capital funds, including how 35% of respondents choose which invoices they can pay and which to delay
- Growth projections subcontractors expect in 2025 and their goals for the next 5 to 10 years
Download your free copy of this year’s report to see the full report and discover the insights from high-performing subs.
About billd:
Billd is revolutionizing the way the commercial construction industry thinks about money. We provide subcontractors with purpose-built capital solutions designed for the industry’s unique challenges. Together, we empower businesses to protect their cash for improved predictability and profitability.