Flexbase, a construction technology company, plans to offer something new: a particular credit card for the construction industry. The card provides up to 60 days of interest-free financing.
Flexbase understands automated payments in the construction field; they saw a need for a card that does more. One of the founders, Zaid Rahman, spoke of his father who suffered a heart attack from stress when a customer failed to pay a million-dollar invoice to his Dubai-based construction company. Determined to make sure this doesn’t happen again, Rahman and his partner HAdi Solh want to offer Flexbase to small to mid-sized construction companies.
“Most construction companies are either broke or one degree away,” Rahman told TechCrunch in an interview. “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.”
In addition to the 60-days of financing, which they call a “game-changer” in an industry where it typically takes more than 100 days to get paid, Flexbase plans to process construction invoices, which can be anywhere from 50 to 100 pages, including compliance documents. One piece of missing information can cause vendors to reject invoices. But by automating the system, Flexbase claims to cut the payment time by 50 days, on average.
“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,” Rahman added. “We are providing you enough credit in two minutes to grow the kinds of projects and the client base.”