The short answer: Slow payments cost the U.S. construction industry $280 billion in 2024 and $299 billion in 2025 — roughly 14% of every dollar spent on construction. That cost lands hardest on the subcontractors and specialty trades who do the work. We built Breva® to shorten the work-to-cash cycle for those firms, because the gap between completing work and getting paid is no longer a back-office problem. It's the single biggest tax on small construction businesses in America.

The number that should be a national scandal

Most industries have a number they talk about constantly. Healthcare has waste. Retail has shrinkage. Construction has a number too — it's just one almost nobody outside the industry has heard.

Rabbet, a construction finance platform that has tracked this issue for years, found that slow payments cost the U.S. construction industry $280 billion in 2024. The 2025 report, released in November, put the figure at $299 billion — a hidden 14% tax on a $2.139 trillion market.

To put $299 billion in perspective: it is larger than the entire annual GDP of Finland. It is roughly what the federal government spends on veterans' affairs in a year. It is, by one calculation, enough to build 14 Empire State Buildings — every twelve months — and set them on fire.

That money is not lost to fraud. It is not lost to incompetence. It is lost to the gap between when a subcontractor finishes work and when a check finally clears.

I'm a CPA. I've spent years advising contractors on M&A, capital strategy, and financing. I co-founded Breva® because, after looking at this problem from every angle, I concluded that nothing about it gets better on its own.

What the $280 billion actually buys

The number is abstract until you watch it land on a real firm.

Picture a $4M concrete subcontractor in Atlanta. They finish a slab pour in January. They submit a pay application by the 25th, as the contract requires. The general contractor consolidates it into the owner's draw. The owner sends it to the lender. The lender reviews. Lien waivers move. Retainage is held back. The check finally clears in April.

Ninety days. That is the average. The Rabbet 2024 Construction Payments Report puts the average payment cycle in U.S. construction at 90 days — double the 45-day threshold financial analysts consider healthy for commercial enterprises.

In those ninety days, the sub paid the crew. Paid for material. Paid the fuel bill. Paid insurance. Paid the bonding company. The work was done in January. The money to do it came from somewhere else.

That "somewhere else" is the hidden engine of the entire $299 billion problem. Where does the float come from?

According to Rabbet, 98% of general contractors are incurring personal financial penalties to float payments, with many using retirement savings or credit cards. 82% of contractors report waiting over 30 days for payment, up from just 49% two years ago. General contractors report a 150% increase in using personal retirement savings to float payments.

Read that again. Owners of construction firms are pulling from their 401(k)s to make payroll on work they have already delivered.

That is not a cash management issue. That is a slow-motion wealth transfer out of the firms that build the country and into the financing structures that finance the projects.

Why this gets worse, not better

A reasonable person reading the numbers above would assume the market would correct. Subs would refuse bad-payer work. GCs would tighten up. Lenders would underwrite faster. Capital would flow to the bottleneck.

It hasn't. Three structural reasons:

1. The pricing of the float is invisible to the people setting the price.

When a developer pencils out a project, the cost of slow payment doesn't appear as a line item. It shows up as a higher bid from the GC. The GC pads to cover the float they extend to subs. The sub pads to cover the float they extend to the GC. 97% of general contractors said they've increased the price of their bids in 2024 to account for the delays and additional financing costs they've incurred. Contractors inflate bids by an average of 8% to protect against slow payments. The owner pays for the slow payment through the bid, but no one calls it that.

2. The subs who could discipline the system are the smallest players in it.

A $5M electrical contractor cannot make a regional developer pay on time. The sub takes the project on the developer's terms or doesn't take the project at all. 100% of subcontractors factor in a general contractor's payment reputation when bidding, with over 75% reporting they increase bids to GCs due to delayed payments. 88% have rejected projects over concerns about payment reliability. That is the market trying to discipline itself. It is also why bids are scarcer and more expensive: the field of bidders narrows, and the survivors charge more.

3. The MWDBE and emerging-firm segment cannot survive the float at all.

This is the part that does not get enough attention. The PYMNTS Intelligence and American Express January 2025 "Breaking Ground" report found that 56% of subcontractors have turned down work specifically because of cash flow risk — not because they lacked capacity or capability, but because they couldn't afford the float.

For minority-, women-, and disadvantaged-owned firms — many of which are exactly the firms that GCs and CDFIs are trying to bring into their networks for diversity, capacity, and community-impact reasons — the float is the wall. They can do the work. They can win the bid. They cannot finance ninety days of it.

That is how a $299 billion industry-wide payment problem becomes, for a specific generation of contractors, a structural barrier to scale.

Why software hasn't fixed it yet

There is no shortage of construction technology. Procore, Autodesk, Sage, QuickBooks, and a long list of point solutions exist. Pay apps get digitized. Lien waivers get e-signed. Documents move faster.

And the float still exists.

Software has solved the document problem. It has not solved the working-capital problem. A faster pay app that goes into the same approval queue still waits in the same approval queue. The 2025 Rabbet report finds general contractors spend 65 hours per month managing payments to subs and vendors — and the top cause of slow payment cited by both GCs and subs is "lack of organized process."

That is the gap we built into.

What Breva is — and what it isn't

Breva® is a SOC 2 Type II AI-powered financial operations platform, built on Microsoft Azure, for SMB construction contractors in the $1M–$25M revenue range. We also serve CDFIs and community lenders who finance them.

I want to be precise about what that means, because in this category precision matters and the cost of imprecision is real money in someone's wallet.

Breva is a fintech platform. Breva is not a lender. Breva is not a chartered financial institution. Our parent legal entity is Cadence Financial Group, Inc. DBA Breva.

What we ship today:

• Pay-app workflow, WIP, and Cash Plan — so the document side of the work-to-cash cycle stops being where time is lost.
• Retainage handling — so the held-back portion of every job is visible, tracked, and managed instead of being a black box.
• Funding Tab — embedded financing access through partner lenders (Quantum is live in V1; additional lenders integrated as relationships are executed). The capital comes from licensed lenders. Breva is the interface.
• Bonding Score — visibility into a contractor's bonding posture for sureties and contractors alike.
• Human bookkeeper layer — because the smallest subs don't have a CFO and the software alone is not the answer.
• Breva Score — a proprietary 300–850 financial-health score that helps contractors, GCs, and capital partners understand readiness on the same numerical scale.
• Ask Bre™ — an AI agent that functions today as a financial coach on the Breva Score, cash-flow, and work-to-cash interpretation. (Ask Bre™ does not provide legal or tax advice. Several capabilities on the Ask Bre roadmap — spec Q&A, bid leveling, estimate QA, quote chasing — are in development and are not current capabilities.)
• Pay-App Benchmark — a free assessment at benchmark.breva.ai that helps a sub see where their pay-app posture sits relative to the industry.

The thesis: shorten the work-to-cash cycle, make the contractor's financial readiness legible to capital partners, and the $299 billion problem starts to compress from both ends.

Who else this is for

Most fintech for construction is built either for the developer at the top of the stack or for the bank financing the project. Both already have advocates. The party at the bottom of the stack — the sub doing the work — has had software sold to them. They have not had software built for them.

This piece is for three audiences, and Breva is built for all three:

Subcontractors and specialty trades ($1M–$25M). You are the firm doing the work and floating the cost. Breva is built around your workflow first.

GCs. A GC that can plug into a network of bid-ready, financially legible subs wins better. Breva is the layer that makes a sub's readiness visible without asking the sub to assemble a financing package from scratch every bid cycle.

CDFIs and community lenders. You are trying to underwrite firms that don't fit the conventional regional-bank credit box. The Breva Score and the Funding Tab give you a structured view of a borrower you couldn't see clearly before. The capital is yours. The visibility is ours.

What we are not promising

I am writing this in May 2026. We are a fintech serving fewer than 50 SMBs at this point. BuildForward™ — our 10-week financial operations accelerator for subcontractors — is forming its first cohort right now. No cohort has graduated. We have not published outcome data on BuildForward™ because no verified outcome data exists yet. When it does, we will publish it with the methodology attached.

I mention this because the worst version of a fintech is one that confuses a roadmap with a record. We are not going to do that. The skeptical contractor reading this — and you are the audience I respect most — has been promised the moon by software vendors for two decades. We are not in that business.

What we will say with full conviction:

The work-to-cash cycle in construction is the single largest hidden cost in one of the largest sectors of the U.S. economy. It is getting worse, not better. It is structurally concentrated on the smallest and most diverse firms in the industry. And no amount of faster documents will fix it without a financial-readiness layer underneath.

That is what we are building.

What you can do this week

If you run a subcontracting firm, the most useful thing you can do in the next seven days is take 12 minutes to run your pay-app posture through the Pay-App Benchmark. It will tell you, against industry data, where your work-to-cash cycle is leaking time. It is free. It does not require you to sign up for anything else.

If you run a CDFI or a GC partner program, the most useful question you can ask is the one we ask every partner we work with: of the subs in your network, how many can you actually finance against a clean readiness view today? If the answer is "a small fraction," let's talk.

The short version

A $299 billion problem does not get solved by a slide deck. It gets solved by changing the unit economics of how subs get paid and how capital partners can see them clearly enough to fund them. That is what Breva is. That is why we built it.

FAQ

Why is the construction industry losing $280 billion to slow payments?

According to Rabbet's 2024 Construction Payments Report, the industry lost $280 billion in 2024 because the average construction payment cycle is around 90 days — double the 45-day threshold financial analysts consider healthy. The 2025 update from Rabbet put the figure at $299 billion, equivalent to roughly 14% of total project costs. The cost compounds through inflated bids, financing charges floated by contractors, and time spent administering payments.

Who pays the cost of slow payments in construction?

Initially, subcontractors and general contractors absorb the float — often by borrowing, using personal credit cards, or pulling from retirement savings. Ultimately, project owners pay through inflated bids. Rabbet reports that 97% of general contractors increased their bid prices in 2024 to account for payment delays.

Is Breva® a lender?

No. Breva® is a SOC 2 Type II financial operations platform for SMB construction contractors and CDFIs. Breva® is not a lender or chartered financial institution. Lending is provided by licensed partner lenders integrated through Breva's Funding Tab. The legal entity behind Breva® is Cadence Financial Group, Inc.

What is the Breva Score?

The Breva Score is a proprietary financial-health score for construction contractors, modeled on a 300–850 scale familiar to anyone who has seen a consumer credit score. It gives contractors, GCs, and capital partners a shared numerical view of a firm's financial readiness for bidding, bonding, and financing.

What does Ask Bre™ do today?

Ask Bre™ is Breva's AI agent. Today, it functions as a financial coach on cash-flow, work-to-cash cycle, and Breva Score interpretation. It does not provide legal or tax advice. Additional Ask Bre™ capabilities — including spec Q&A, bid leveling, estimate QA, and quote chasing — are in development and are not current shipped features.

How big does a contractor need to be to use Breva?

Breva® is built for SMB construction contractors in the $1M–$25M annual revenue range. We work with GCs, subcontractors, and specialty trades, including electrical, mechanical/HVAC, and concrete/sitework firms.

Where can I see the data behind the numbers in this post?

Primary sources for this post: Rabbet 2024 and 2025 Construction Payments Reports; PYMNTS Intelligence and American Express, "Breaking Ground," January 2025; Built 2025 Construction Cash Crunch Survey; Mobilization Funding 2025. Citations are linked throughout. Breva's own benchmark data is available at benchmark.breva.ai.

Sources

1. Rabbet, 2024 Construction Payments Report (October 2024). https://rabbet.com/reports/construction-payments-2024
2. Rabbet, 2025 Construction Payments Report (November 2025) — finding the cost of slow payments rose to $299 billion. https://rabbet.com/reports/construction-payments-2025
3. PYMNTS Intelligence and American Express, Breaking Ground: Solving Construction's Delayed Payments With Digital Tools (January 2025). https://www.pymnts.com/tracker_posts/breaking-ground-solving-constructions-delayed-payments-with-digital-tools/
4. GlobeNewswire / Rabbet press release, "Slow Payments Cost $280 Billion in 2024" (October 1, 2024). https://www.globenewswire.com/news-release/2024/10/01/2955968/0/en/Slow-Payments-Cost-280-Billion-in-2024-Threaten-U-S-Construction-Industry-s-Financial-Health.html
5. GlobeNewswire / Rabbet press release, "Slow Payments Cost $299 Billion in 2025 — a Hidden 14% Tax on U.S. Construction" (November 13, 2025). https://www.globenewswire.com/news-release/2025/11/13/3187310/0/en/Slow-Payments-Cost-299-Billion-in-2025-a-Hidden-14-Tax-on-U-S-Construction.html
6. DocJoist, Construction Payment Statistics 2026 (March 2026), aggregating Rabbet, Billd, Built, and Mobilization Funding data. https://www.docjoist.com/reports/construction-payment-statistics
7. CFMA / Siteline, "Why Subcontractor Billing Breaks & How to Fix It." https://dakota.cfma.org/articles/why-subcontractor-billing-breaks-and-how-to-fix-it

This post is for educational purposes only and is not financial, legal, or tax advice. Market conditions referenced are current as of May 2026.