Running a construction company is hard work—and I don’t just mean the labor. Managing finances, chasing payments, and finding new clients is a full-time job in and of itself, and it’s rarely the reason that anyone got into this field. Over the last few years, we witnessed a mild shift of philosophy with the introduction of new payment solutions, allowing for faster, more secure transactions while also greatly expanding your client pool.
Cryptocurrencies might not be the big talk on the job site, but in offices and boardrooms across the globe, it’s been on everyone’s lips for a while now. As more and more people and industries turn to crypto, any business owner needs to ask themself, “Are crypto payments right for me?”
Why Use Crypto in Construction?
It’s a valid question. After all, this industry is all about the physical—the tangible. Something about cryptocurrency just feels a little… ”off.” Well, I’ve got news, it’s 2023, and crypto isn’t going anywhere. At this point, not taking crypto is like a restaurant not accepting debit cards—behind the times and borderline self-sabotaging.
In 2019, companies took an average of 83 days to settle invoices. Leaving that much money as outstanding payments can hinder cash flow and has been known to grind entire projects to a halt. Crypto can be a part of the solution to this problem. Not that it will make the invoice debtors actually pay up no questions asked, but any payment handled via the blockchain is transacted in a matter of minutes (and possibly instantly, depending on currency and platform), meaning that you don’t hear excuses like “bank is still processing.” The payment is settled as soon as it’s sent.
That speed also provides flexibility. As the scale of global commerce continues to expand, the need for reliable, secure, and speedy international transactions has become an ever-important concern. This is another area where crypto payments can really help. Since Bitcoin exists independently of any fiat currency, it’s immune from pesky things like exchange rates.
But the biggest benefit of accepting crypto is just how many new avenues it opens up for attracting new customers. There’s a sizable group of crypto holders who are only interested in swapping their coins directly for goods or services, and by tapping into that market, it’s possible to reach an entire new demographic.
What are the Risks of Accepting Crypto in Construction?
Look, no system is perfect. If crypto were flawless as a payment system, we’d all be using it for everything. While the benefits are real, there are also a few risks that anyone looking to start accepting cryptocurrency for payments needs to be aware of.
The single biggest issue that many companies and customers have to come to terms with is the fact that there are no legal protections for any crypto transactions. What does that actually mean? Well, in short, it means that if something goes wrong or there is any dispute, you’re straight out of luck. Unlike credit cards, checks, or bank transfers, crypto payments are typically not reversible without consent from the original recipient. While this is more of a risk for the purchaser, business can still be hurt by dealing with bad PR or angry clients if there’s an issue.
This becomes a little bit more complicated when you start combining real-world off-line assets and businesses, exactly what construction work is in this case, with online aspects of brokering a deal and making a payment for it. If you compare it to online-only businesses, where a huge chunk of this industry has shown to be the early adopters, with the betting and casino industry at the forefront, it paints a weak picture. Adding crypto as a payment option next to regular fiat options like debit and credit cards, something SpinFever Online Casino has both, enabled users to play games by paying with bitcoin. It’s understandable that most of the contractors would have a “knee-jerk reaction” to building a regular brick-and-mortar casino before laying into an endeavor like this, but that doesn’t mean other valid solutions should be ignored.
On the other hand, let’s say that you do everything right and manage to avoid any losses due to bad payments; you’re still not out of the woods yet. While crypto payments aren’t regulated by the government, Bitcoin is considered to be a security for tax purposes. Why does this matter? Well, it’s complicated.
As a security, cryptocurrencies like Bitcoin aren’t treated as “money” or “income” per se. Instead, they are treated as property with a specific market value, and that market value is decided at the time of purchase (all crypto transactions are recorded on a public ledger that anyone can access). Payment in property like securities is treated as income and is taxable.
Additionally, as a security, Bitcoin is subject to a capital gains tax meaning that if its value increases between your acquisition and sale, you’ll have to pay even more. Exactly how much and when is a matter for discussion with a tax professional as the law regarding crypto as income and investment is complicated, to say the least. The moral of the story, however, is that if you’re earning crypto you will need to pay at some point.
How are Construction Companies Using Crytpo?
As of September 2023, nearly 60 million Americans own some form of crypto—that’s close to double what it was in 2022. With that many people still getting on board, it’s absolutely still not too late to get in the game. The best thing about accepting crypto is that you don’t actually need to do anything differently, in fact, there are several companies out there already showing just how easy it can be to start accepting crypto.
Naples Luxury Builders
Based in Naples, Florida, Naples Luxury Builders was founded in 2015 and, in 2021 decided that it was time to start accepting crypto. Their first project to take Bitcoin was a massive $4.9 million, 4,001 square-foot home, fully loaded with five bedrooms, four bathrooms, and a four-car garage. The property’s listing agent was amazed at how many people were interested in buying a house for Bitcoin, stating that “Over the course of the last three weeks I’ve probably gotten probably two to three calls a week from people specifically asking about the payment of Bitcoin.”
Fire & Ice Heating
Up in Columbus, Ohio, Fire & Ice Heating has also been among a move to crypto payments and now accepts Bitcoin through BitPay. Customers can pay for any installation, tune-up, repair, or any other service with crypto. Fire & Ice also offers a full guarantee and promises refunds for crypto purchases. However, due to the fact that they don’t actually hold any crypto (they convert everything to cash as soon as they receive it) any refunds issued are in cash.
Solar Integrated Roofing
Operating across North America, Solar Integrated Roofing Corp. is one of the most respected installers of single-source solar power and roofing systems. In a bid to target younger homeowners, they’ve recently begun accepting several major cryptocurrencies that are eager for alternative payment methods. They accept a wide range of coins through the Coinbase Commerce platform, meaning it’s easy for anyone with crypto to get involved.
While the construction industry has unique needs and issues, payments don’t need to be one of them. The speed and flexibility of crypto payments have already shown themselves to be valuable in countless other markets, and there’s certainly a conversation to be had regarding contracting as well.
