Award-Winning Construction Loan Management Software
Rabbet is thrilled to receive The 2018 Fintech Breakthrough Award for our construction finance software. The mission of the FinTech Breakthrough Awards is to honor excellence and recognize the creativity, hard work, and success of FinTech companies, technologies, and products.
Why did we win?
Rabbet's mission is to improve the construction finance management process—an area that has historically been underserved by technology. Our software addresses the needs of capital partners and project owners involved in the tedious and time-consuming process of construction loan administration. Specifically, we’re helping institute process automation, expedited payments, and a better approval workflow leading to lien-free completion of projects. The demand for advances in construction finance technology has never been more pronounced.
In 2018, faster wage growth leads to a tightening of the construction workforce. As the commercial real estate market continues to thrive, both capital partners and developers are looking for competitive differentiators while increasing efficiencies, cutting costs, and retaining their best employees. In contrast to these needs, innovation in construction loan administration has taken a backseat to other FinTech advances. Construction finance management and lien management are two areas ripe for innovation, as one of the biggest contractual threats to both lenders and real estate borrowers is the mechanic’s lien. Rabbet's one-of-a-kind software tackles this challenge head-on, leading to faster payments and lien-free completion of projects.
To better understand the impact slow payments have on overall loan management, we’re in the process of surveying contractors and subcontractors. Our preliminary survey results show that only 28% of subcontractors receive payment net 30. Another 29% wait between 30-60 days and 43% of those surveyed must wait 90+ days for payment. While waiting for payment, contractors must float payments to their subcontractors and suppliers. The majority of them are using a line of credit or personal savings to float the payments, and 85% say that they incur additional fees for floating payments. What’s most troubling is the fact that 81% of the respondents said that they have filed a lien due to slow payments.
This market pain point is why Rabbet developed a better way to process payments to contractors while ensuring lien-free completion of projects. Rabbet's cloud-based construction finance software improves efficiencies while reducing risks within the construction loan environment. It’s one of many ways we’re differentiating our product and service within the crowded FinTech marketplace.
