This Startup Promises to Slash Construction Payment Delays—Is Your Firm Missing Out?

The construction industry faces significant challenges when it comes to cash flow, particularly in the realm of invoicing and payment processing. Businesses in this sector often endure longer payment cycles than those in other trades, largely due to outdated financial platforms that fail to support modern payment options. Enter **Payra**, a Nashville-based startup dedicated to automating accounts receivable operations in the construction trades.

Recently, Payra secured a $15 million investment from **Edison Partners**, marking a major step in the company's growth trajectory. This funding is particularly noteworthy as it is Payra’s first outside capital after being bootstrapped by its founders, **Thomas Cecil** and **Riley Lovingood**. With this financial backing, Payra aims to revolutionize payment processing within the construction sector.

So, what exactly is Payra doing to address the industry's payment woes? The startup offers a software solution that integrates seamlessly with most **Enterprise Resource Planning (ERP)** platforms, including those that are up to 30 years old. Many construction businesses operate on legacy systems that are not designed for digital payments, often leaving them to navigate cumbersome processes involving paper invoices, checks, and spreadsheets. Payra’s technology aims to eliminate these inefficiencies by enabling contractors to accept digital payments, such as credit cards and Automated Clearing House (ACH) transfers, directly tied to their existing finance systems.

“The magic for [companies] is that they’ve been basically told for the last 20 years, ‘Hey, you can accept credit cards, but you’re going to have to just figure out what that ties to,’” Cecil explained in a recent interview. By employing **artificial intelligence-enabled technology**, Payra allows payments to be incorporated directly into a company’s system of record, a feature that was previously unattainable for many construction firms. This integration eases the process of payment reconciliation, enabling contractors to focus on their core business rather than administrative hurdles.

The construction industry is inherently fragmented, with regional players dominating local markets. For instance, the **U.S. ready-mix concrete industry** comprises approximately 12,000 companies, each operating within a specific geographic radius due to the perishable nature of their product. As a result, Payra is targeting larger general contractors in sectors like commercial concrete, lumber, and HVAC. The company’s services are particularly valuable in these areas, where payment processing has traditionally lagged.

While competing firms like **BillTrust**, **Growfin**, and **Versapay** also offer accounts receivable automation, Payra differentiates itself through its ability to work with legacy ERP systems without requiring costly upgrades. “The vast, vast, vast majority of these businesses are on ERP systems the general public probably hasn’t heard of, so the challenge is working with what they have in place versus pitching them a rip-and-replace strategy,” Cecil noted.

In terms of revenue, Payra generates income from a percentage of transaction fees. Their average credit card payment stands at around $3,500, but it is not uncommon to see transactions exceeding $400,000. The company’s approach is designed to alleviate the friction that general contractors face when trying to make payments, allowing them to pay directly from an invoice on their devices—whether it’s a phone or a computer.

Given the complexities of managing large-scale payments, Payra initially considered using platforms like **Stripe** or **PayPal Holdings’ Braintree** for its payment processing needs. However, the founders found these options impractical due to the large ticket sizes involved, which often led to payment delays or blocks due to risk controls. “You can’t do that in this business because the tickets are so large that the risk controls of those modern processors will pend the payment or block the payment,” Cecil emphasized.

With the recent investment from Edison Partners, which will aid in the expansion of their direct sales strategy, Payra is poised to make significant strides in the construction industry. As the demand for digital payment solutions grows, Payra's innovative approach may just be the key to resolving the long-standing payment challenges faced by construction firms across the United States.