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Procore Technologies is conducting a materials financing program via which it purchases construction materials on behalf of subcontractors. The company this week said the program is designed to alleviate problems faced by subs, who typically must pay suppliers in 30 days but are often themselves paid in 120 days.

“Procore helps to alleviate working capital constraints by purchasing materials directly from suppliers and then selling them to subs on deferred payment terms that are better aligned with their time,’ according to Procore CEO Tooey Courtemanche. Speaking during the week’s earnings webcast for the second quarter ended June 30, he said Procore is in the “very early stages of this program.” The software company charges an origination fee at the beginning of the process and a weekly finance charge, expecting subs will typically pay Procore back in 120 days. Courtemanche stressed Procore obtains lien rights so financing is secured against the property financed. He said through its ownership of lien management software company, Levelset, purchased last year, Procore can use Levelset’s data  to understand the payment history of subs. Courtemanche continued, “We can leverage Levelset's core lien management offering to manage, track and enforce our lien rights of various states and jurisdictions.” Procore never takes possession of the goods being financed. However, executives agreed the financing program has the potential to be very profitable. “We think it has a lot of potential and that it should drive great economics at scale,” said CFO Paul Lyandres.



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