Solving construction payment pain.
Construction is hard to do. There are too many things to keep track of and too many places in the process for things to go wrong. But I don’t think it has to be that way specifically with the payment process.
While still a builder I became obsessed with this problem and I tried everything to fix it. I worked with my lender and set up a system where I could do draws weekly so I could collect the checks and mail them rather than the whole run around. I found that my subs were happier and even more available for my other jobs. The increase in loyalty to my company was extremely valuable and I loved my lender for helping me build this process. My in-house accountant was happier because they didn’t have to field calls about payment status, or even the physical delivery of payment. However, on the flip side I found that my lender didn’t like the process as much as I did. When they came to me with their problems it opened my eyes to the pain the lender has with construction payments. The subcontractors and builders benefit greatly from more frequent draw processing, but it can be an extra burden on the banks.
The last piece of the puzzle was to make the process easier for the lenders, as well. I started researching lender draw processes across the country and found that their pain points were consistently similar.
This is what needs to happen. There needs to be a platform that allows lenders to process payments without using excel or separate check printing software. There needs to be a service that provides real time data and data analytics on loans for deeper understanding. A platform where all parties involved on the loan can collaborate and take action while automatically checking compliance is a necessity for lenders looking to scale their loan portfolio.
Fortunately this idea now exists. Our team at CoFi has taken a broken system and brought it to the 21st century. Using what we’ve learned about the pain of lenders, builders, subcontractors and owners, we have created a technology that is changing the way construction is done.