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Questions


What is the Early Payment Program™ (EPP™)?

The Textura Early Payment Program is an innovative alliance between Textura® and Greensill Capital, our financial services partner, to help general contractors gain competitive advantages, reduce risks, and improve their business relationships and balance sheets. EPP provides third-party funding that enables general contractors to accelerate payments to subcontractors, in exchange for a fee tied to the invoiced amount. EPP works by leveraging the financial strength of the general contractor’s balance sheet and using Textura’s CPM® technology to facilitate early payment to subcontractors through Greensill Capital.

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What is Textura’s role?

Textura provides the technology for EPP via our Textura-Construction Payment Management™ (CPM) solution and technology platform. CPM, which is Textura’s online invoicing and payment management solution, has been enhanced to facilitate program administration, including general contractor-specific configuration. In addition, CPM facilitates payments to subcontractors from funding sources, as well as the transfer of funds from general contractors to funding sources. As with CPM and our other solutions, we provide technology and support.

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Who is Greensill Capital and what is their role in EPP?

Greensill Capital is an independent financial services firm and principal investor group specializing in structured trade finance, working capital optimization, specialty financing and contract monetization. The firm was founded in 2011 by a seasoned team of trade finance specialists with the goal of providing innovative and alternative structured solutions for corporations and financial institutions globally. CEO Lex Greensill and his team created the global supply chain funding businesses at both Morgan Stanley and Citibank before starting their own business at Greensill Capital. Lex acts as the senior advisor on supply chain finance to U.K. Prime Minister David Cameron and has advised the White House on its SupplierPay program. Lex was also appointed as a Crown Representative to Her Majesty’s Government, a role focused on ensuring the British government gets better value in its supplier purchases.

Greensill Capital performs the underwriting and provides funding for EPP*.

* Funding for EPP is uncommitted and subject to the absolute discretion of Greensill Capital.

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Why is EPP needed?

EPP addresses a longstanding structural challenge of the industry – namely, that work in process on a construction project is funded by the subcontractors. Subcontractors perform the work but are typically paid for that work 30 to 90 days – or more – after they submit an invoice. Subcontractors’ cost to finance this working capital gap can be high, and not knowing when payment will be received creates serious cash flow issues. In addition, subcontractors, like most small and medium-sized enterprises, face an increasingly challenging financing environment, which further complicates their access to affordable working capital. This situation puts pressure on a subcontractor’s balance sheet, acts to limit their ability to grow and invest, and in some cases leads to business failure. This is as much of an issue for the general contractors that depend on their subcontractors’ performance as for the subcontractors themselves. By enabling general contractors to accelerate payments to subcontractors, EPP should help reduce financial strain on subcontractors, strengthening them and enabling them to grow.

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What are the key benefits for general contractors?

EPP provides numerous potential benefits to general contractors, including: competitive differentiation from lower cost of capital in bids, resulting in more work won; financially stronger subcontractors, which should reduce the risk of subcontractor default; stronger relationships with subcontractors; and improved balance sheets.

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What are the benefits for subcontractors?

Potential benefits for subcontractors include: cash flow and working capital improvements from earlier, more predictable payments; stronger balance sheets, enabling growth and expansion; an enhanced competitive position, helping them win more work; stronger relationships with general contractors; and less exposure to business owner’s risk.

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How does EPP work?

Participating general contractors sign a funding agreement with Greensill Capital, which arranges general contractor-specific EPP funding. General contractors then enroll projects and subcontractors, using the CPM solution. Subcontractors that elect to participate accept invoice payment terms, including a fee tied to the invoiced amounts, through a fast and easy enrollment opt-in in CPM. As project work progresses, subcontractors submit their invoices to the general contractor for approval via CPM. After invoices are approved, accelerated payments to subcontractors are delivered via CPM using EPP funding*. At maturity, general contractors settle invoices with the funding source.

* Funding for EPP is uncommitted and subject to the absolute discretion of Greensill Capital.

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Are there programs like this one in other industries?

Yes. Companies in various industries use such supply chain finance programs to increase smaller suppliers’ cash flow and/or access to affordable working capital.

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How will EPP be implemented by a general contractor?

Implementation occurs in two stages. Greensill Capital works with a general contractor to create a customized funding program. Once the financial/structural aspects of the general contractor’s program have been finalized, Textura works with the company to modify an existing CPM program to incorporate EPP or, in the case of a new CPM client, handle the full implementation of that solution.

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Does a general contractor need to be a CPM client?

Yes. General contractors must use Textura’s CPM solution to participate in EPP, as program administration and configuration are dependent on CPM’s client data records and its invoicing/payment process functionality.

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What other functionality does CPM offer?

A web-based, Software-as-a-Service (SaaS) collaboration solution, CPM electronically integrates all construction payment management processes - including billing, lien waiver collection, progress claims, statutory declarations, sub-tier waivers, compliance management and payments - into a seamless workflow.

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Will this create additional work for my project teams already using CPM?

No. Your project teams using CPM will continue to process invoices and handle lien waivers and compliance materials in the same way.

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Want more information about how EPP helps pay subcontractors faster?

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