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To finance slow payments, the estimated overhead included in subcontractors’ bids is 2.75% and 5.81% for general contractors. This year’s report uncovered that slow payments to subcontractors and general contractors will create $136B in additional costs for the US Construction Industry in 2021.
General contractors and subcontractors estimate that the cost of floating payments for wages and invoices represents $136 billion in excess cost to the industry, a 36 percent increase from the cost reported in 2020. Findings indicate those costs are passed on to real estate developers and financiers in the form of project delays and higher bids from contractors.
The 2021 State of Construction Finance Report dives deep into how processes and perceptions of construction finance have changed as well as what these processes could look like in the future.
Each year Rabbet surveys commercial real estate lenders and developers to uncover the latest industry trends in CRE. In 2019’s report, we revealed a huge shift towards automation and uncovered... Read More
