Flexbase has unveiled what it claims is the construction industry’s first credit card to offer up to 60 days interest-free financing.
The fintech start-up, which develops automated payments tools for contractors and the construction industry, was started by Zaid Rahman and Hadi Solh to target small and medium-sized enterprises.
Zaid Rahman, CEO & founder of Flexbase, said: “Most construction companies are either broke or one degree away. One of those reasons is that most clients don’t like to pay on time.
“Another is that banks don’t like construction companies because of that cash flow problem, so the company is less likely to get short-term capital. That is also why they go bankrupt so often.”
Solh referred to the 60 days of financing as “a game-changer” for an industry where it typically takes more than 100 days to get paid.
One of the drivers for that is that while the typical invoice can be one or two pages, construction invoices can easily be 50 to 100 pages, which includes state and county compliance documents. According to Rahman, if even one piece is missing, the entire invoice can be rejected.
By automating expense management, Flexbase can reduce the time it takes for invoices to flow between accounts receivables and accounts payable and decrease the time to payment by 50 days.
Rahman added: “You can’t evaluate construction companies like other businesses when it comes to capital, but by doing the underwriting, we provide companies with enough credit to grow their businesses.
“We are providing you enough credit in two minutes to grow the kinds of projects and the client base.”
Any construction company can apply for Flexbase Card, which is launching in Houston,USA, first, but the co-founders said those who use the card with the other Flexbase tools will be able to gain deeper insight into the company’s financial data and be eligible to borrow larger credit amounts.
Image: PM Images/ Getty Images
Are you a building professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.