← Back to Section 3: How GCs & Trade Partners Benefit from EPP

Section 4

How Early Pay Program Compares to Other Financing Options

EPP is completely transparent and more stringent than traditional factoring. We created a program that benefits not only trade contractors, but also General Contractors.

How Does EPP Compare to Traditional Factoring?

Factoring, Re-Factored

EPP is completely transparent and more stringent than traditional factoring. We created a program that benefits not only trade contractors, but also General Contractors. 

Unlike traditional factoring, EPP works with the General Contractor for a transparent relationship. The General Contractor decides which of their trade partners or projects are eligible for EPP, and the GC has final approval of the EPP application.

When your trade partners opt into EPP, GCs also gain access to detailed financial information that can be used for prequalification and to help lower SDI premiums.

Finally, EPP is a win-win for GCs and Trade Partners. For each invoice paid early through EPP, the GC is reimbursed for SDI premiums.
Traditional Factoring Early Pay Program

red-XOnly helps the trade contractor while increasing risk for the General Contractor

green-checkEPP is the only mutually beneficial financing option for Trade Contractors and General Contractors

red-XDoes not ensure suppliers are paid before funds are released

green-checkEnsure downstream lien holders are paid prior to EPP disbursement

red-XHas no impact on SDI premiums

green-checkReceive a rebate for SDI premiums each time your trade partner is paid through EPP

red-XNot transparent – GC does not have access to key financial data

green-checkGet access to important prequalification data for your trade partners to help lower your SDI premiums

red-XOften a high-risk “last resort” option that GCs are unaware of until asked for payment

green-checkEPP approval is more stringent than traditional factoring and completely transparent

How Does EPP Compare to Traditional Debt?

Interest-Free Capital

Debt financing, like bank loans or credit cards, can be quick, but it’s often expensive and inflexible. Further, bank loans often have low interest rates, but require large amounts of collateral or personal guarantees, which is why they can be very difficult to get.

Constrafor provides a better option: invoice financing, a financing option that builds on one of every company’s biggest assets – invoices.

EPP is not a loan, it does not count as debt on the balance sheet, and it does not require collateral, making it a flexible and affordable option for trade partners in need of low-cost capital.

With EPP, trade partners can dramatically accelerate their payment cycle, improve cash flow, and reduce costs - all without incurring debt or giving up equity. 
Feature EPP Debt

Lending Amount Limitations

UNLIMITED

YES

Impact on Bonding Capacity

INCREASES

DECREASES

Covenants/ Recourse Lending

NO

YES

Legal/ Setup/ Admin Fees

NO

YES

Contract Negotiations

NO

YES

Time Needed to Manage

NONE

SIGNIFICANT

On-Demand, One-Click Enrollment

YES

NO

Debt on Balance Sheet

NO

YES