Subcontractors – Get paid in 2 days.
Head Contractors – Get paid for participating.
ProgressPay is a new financing product designed specifically for subcontractors in the construction industry. It gives subcontractors the option to be paid for their progress claim within 2 days of claim approval in Payapps.
As ProgressPay leverages the financial strength of the head contractor rather than each individual subcontractor, our finance partner Omniveta is able to offer subcontractors very competitive rates.
There is no cost to the head contractor and no change to the existing payment terms originally agreed with the subcontractor.
Participating head contractors receive a cash On-Time Payment Incentive equal to 0.50% of any claim value financed.
- Subcontractors use Payapps to submit progress claims to the head contractor for assessment
- Once their claim is approved, subcontractors can request finance for the claim, and will receive 85% of the value of the claim within 2 days, and the remaining 15% (less fees) when the head contractor pays the invoice on originally agreed payment terms
- The head contractor pays Omniveta instead of the subcontractor and then receives the 0.50% On-Time Payment Incentive, completing the cycle
- Free to join and no requirement to ever finance an invoice
- No administration fees, management fees or minimum turnover commitments
- No personal or real estate security required
- Completely flexible; can select which invoices to finance, even on an invoice by invoice basis
- Facilitates on-time payment to suppliers and employees, forging stronger relationships
- Enables more competitive bids, more business wins and stronger business growth
- Access early payment discounts from suppliers
- Increased ability to manage own cashflow
- Simple to use. After joining, subcontractors can select which invoices to finance with a few clicks, and receive their cash within 2 days
- No change to claim process; only approved claims are eligible for early payment
- Stronger subcontractors with lower risk of financial distress or business failure
- Ability to turn off ProgressPay at multiple levels (for individual projects, contracts or subcontractors)
- No guarantee or security required
- No change to existing payment terms
- Significant cash return with On-Time Payment Incentive
- Ongoing credit and business status monitoring of subcontractors
- Positive PR message – supporting subcontractors
- Less angst from subcontractors chasing payment, improving relations on site
- Head contractors who participate in ProgressPay receive an “On-Time Payment Incentive” equal to 0.50% of any invoice value financed
- The incentive is payable when the head contractor pays a subcontractor’s financed invoice to Omniveta “on time” (ie. within the original payment terms agreed with the subcontractor e.g 30 or 60 days).
- Incentivises the head contractor to pay on time, which assists in minimising the period the subcontractor may incur additional fees
- Omniveta will only fund progress claims up to 90% of the total value of original subcontract works plus approved variations
- Unapproved variations are not eligible for ProgressPay. Where they are paid by the head contractor they are simply passed through to the subcontractor when received by Omniveta (without any fees)
- Retention of any form is not eligible for ProgressPay
- The head contractor can turn off ProgressPay at multiple levels (for individual projects, contracts or subcontractors)
What is ProgressPay?
Payapps has partnered with Omniveta Finance, an international debtor finance specialist, to offer head contractors the ability to empower their subcontractors by providing them access to a product that helps improve their cash flows and strengthen and grow their businesses.
Why is ProgressPay being offered?
Payapps had already simplified, improved and streamlined the claim and approval process for thousands of head contractors and subcontractors. We then turned our attention to the payment side of the process and have developed a solution that bridges the working capital gap faced by subcontractors and that benefits everyone in the construction supply chain.
How much does ProgressPay cost?
Most debtor finance companies never disclose their fees. Our partner Omniveta Finance is proud to provide transparent and inclusive rates. There is an initial fixed fee of 3.5% of the invoice value, with nothing further payable until after 30 days, and only then if the invoice is still outstanding. From that point there is an additional 0.07% per day until the General Contractor makes payment. Omniveta Finance do not charge any additional interest, penalties, arrangement fees or management fees. This makes it far easier to understand and calculate the true cost, and avoids the typical hidden charges many industry participants rely on in order to market a “cheaper” headline rate.
Do I need to be using Payapps to be eligible for ProgressPay?
Yes. ProgressPay is only available when your head contractor uses Payapps and has elected to participate in the program.
How does ProgressPay differ from other factoring and invoice discounting products?
ProgressPay is not only a disclosed facility, it is only offered with the complete support of the participating head contractor, and offers their subcontractors the ability to receive an advance payment of 85% of the invoice value, far higher than the construction industry standard. There is no minimum charge, no management fees and subcontractors can choose which invoices they would like to receive advance payment for, even on a claim-by-claim basis.
Who is Omniveta Finance?
Omniveta Finance is an international debtor finance specialist. Omniveta Finance has its roots in Scandinavia, where they have been administering complex financial products on behalf of banks and other financial institutions for more than ten years. Combined with a company philosophy of simplicity and transparency, this experience has helped secure their position as a trusted business partner in delivering industry specific debtor finance solutions. Omniveta Finance are currently represented in Denmark, Sweden and Australia, and expect to open offices in Germany, UK and Norway in 2016-17.