Flexbase unveils the construction industry’s first credit card – TechCrunch

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Flexbase is shaking up construction financing with a new credit card – the industry’s first, according to the founders – that offers up to 60 days of interest-free financing.

The company, which develops automated payment tools for contractors and the construction industry, was started by Zaid Rahman and Hadi Solh to target small and medium-sized businesses.

Rahman, a Theil scholar, and Solh grew up in construction families, hearing stories around the dinner table about cash flow issues. When Rahman’s father, who ran a construction company in Dubai, saw a client fail to pay a multi-million dollar bill, he suffered a heart attack. Rahman and Solh have teamed up to form Flexbase so companies have easier access to capital to avoid cash flow issues.

“Most construction companies are either bankrupt or to a degree,” Rahman told TechCrunch. “One of those reasons is that most customers don’t like to pay on time. Another is that banks don’t like construction companies because of this cash flow problem, so the company is less likely to get short-term capital. This is also why they so often go bankrupt.

Any construction company can apply for the Flexbase card, which will be launched first in Houston, but the co-founders said those who use the card with the other Flexbase tools will be able to gain a deeper insight into the company’s financial data and be eligible to borrow larger amounts of credit.

Solh called the 60 days of funding a “game changer” for an industry where it typically takes over 100 days to get paid. One of the determining factors is that while the typical invoice might be one or two pages long, construction invoices can easily be anywhere from 50 to 100 pages, which includes state and county compliance documents. If even one part is missing, the entire invoice can be rejected, Rahman said.

By automating expense management, Flexbase can reduce the time it takes for invoices to flow between accounts receivable and accounts payable and reduce payment time by 50 days.

“You can’t rate construction companies like other companies for capital, but by doing the underwriting we are providing companies with enough credit to grow their businesses,” Rahman added. “We give you enough credit in two minutes to grow the types of projects and the customer base. “


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