Contract Simply is now Rabbet. We’re the same company – just with a new name – building the only intelligent construction finance platform. The content of this post has been preserved with the Contract Simply name.
Contract Simply is thrilled to receive The 2018 Fintech Breakthrough Award for our construction loan management 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?
Contract Simply’s mission is to improve the post-closing construction loan management process – an area that has historically been underserved by technology. Our software addresses the needs of lenders, builders, and contractors involved in the tedious and time-consuming process of construction loan administration. Specifically, we’re helping institute process automation, expedited payments, and a better lien management workflow leading to lien-free completion of projects. The demand for advances in construction loan management 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 lenders and builders 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, mostly in retail banking. Construction loan payment processing and lien management are two areas ripe for innovation, as one of the biggest contractual threats to both lenders and real estate borrowers is directly linked to construction loan payments – the mechanic’s lien. Contract Simply’s one-of-a-kind CSPay feature 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 Contract Simply developed a better way to process payments to contractors while ensuring lien-free completion of projects. CSPay is an award-winning mobile and desktop B2B payment solution that captures legal and tax information and automates construction payments between builders and subcontractors. A builder’s ability to pay subcontractors quickly differentiates her from another builder across the street. What’s more, collecting lien releases is one of the most significant challenges for builders and their subcontractors working in the field. Same day ACH transfers through CSPay not only leads to faster payments for subcontractors and their employees, but it also reduces borrower risk by tying unconditional lien releases to payment acceptance.
Contract Simply’s cloud-based loan management software, and the CSPay feature 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.
