5 ms·

Launch HN: Kanda (YC W21) – Let tradespeople offer finance to their customers

79 points by RobKanda 6y ago

Hey HN! We're Phil, Rich & Rob, the co-founders of Kanda (https://www.kanda.co.uk https://www.kanda.co.uk). We allow general contractors (electricians, builders, etc) to offer pay-monthly options to their clients. Contractors get paid in full like normal, and their clients pay us back over time. Rich was an electrical contractor and after running his firm for 10 years he started to find it harder and harder to compete on price against bigger companies because they could offer pay-monthly options to their clients and he couldn't. When he started to look into it he realized how unrealistic it would be for a little guy like him to be able to offer a pay-monthly option anytime soon. Why? Because lenders put arbitrary barriers to entry like needing to have a yearly revenue of a $1M, so local contractors like Rich get frozen out and bigger companies can dominate the market. Over 80% of construction businesses are local contractors and most of them face the same problem Rich did. So, together we set out to build a solution and we ended up with Kanda. Kanda is an estimating tool that contractors can use to send clients estimates. When the client receives the estimate, we (Kanda), will offer the client the option to pay the contractor in full (like they normally would) or to pay them monthly. If they choose to pay them monthly, then we pay the contractor in full once the client signs off the work and then the client pays us back over the term of the finance agreement, which could be from 10 months to 10 years. This not only helps the contractor to compete on price but it also makes it more affordable for the homeowner to have work done on their house. Win-win. The way we see it, buy now, pay later is revolutionising e-commerce (for good or bad), and the only reason it isn't happening in offline services like construction is because it's hard to standardize the process of a contractor offering the finance. So, that's what our product aims to do. It aims to standardise how contractors send estimates and how they offer finance. Making it easy for them to do both. We’d love your ideas and feedback on what we are making.

stormqloud 6y ago
This is highly country and legal environment dependant. Very difficult to scale. Often a tradesperson can secure a lien on a property as part of their permit for that job. If the tradesperson gets paid,then the security on the debt/loan is gone. In my own case of endless home renovation, a bigger issue is you have to front the workman etc the $$$ to buy the supplies/lumber/etc.
- RobKanda 6y ago
  Whilst the main concept itself is subject to local legal variations, the idea of contractors being able to make their jobs more accessible and more affordable to the average homeowner resonates around the world. What Kanda aims to do is to take this legal restriction minefield away from the contractors, so they can continue to do what they do best, whilst offering their customers an affordable payment plan. Securing a lien when doing smaller work, such as fitting a boiler or rewiring a house, is not ideal when you want to get paid as soon as the job is done. If the customer instead arranges finance with us, the payment can be immediately paid out and the contractor can continue on with their business without worrying if they will get reimbursed. Finally, the concept of fronting the money for the materials arises from the fear of the contractor not getting paid at all; if the job isn't paid for, at least the contractor won't be out of pocket. With us, the money is secured before the job starts. They don't need to worry about being out of pocket from a customer refusing to pay or being unable to pay.
  - stormqloud 6y ago
    Fronting the money for the supplies usually comes from the fact the tradesperson went on a bender after you paid him last time! Also in the area where I live, most home trade jobs are done with as much cash as possible to avoid taxes. The pay cash tax savings is greater then any bank financing. When you pay 50% income taxes you can see that the incentive to work cash is much much greater then formal financing. If a car repair was going to cost $1000, the tradesperson keeps $500 after tax. He's better off to offer you $750 cash. Take $500 now (he's paid up). Then if he still collects the $250 cash that's pure bonus. I didn't even factor in the 20% sales taxes on the work the buyer would have to pay. All I can say is don't try to expand to a newly third world country like Canada. I just can't see it working here.
    - sterwill 6y ago
      I understand the desire to avoid paying tax by taking cash, but is it common that a tradesperson is paying 50% income tax? I only have a US resident's perspective, but that rate seems very high.
sterwill 6y ago
I haven't been in a position where I needed to finance work on my home, but I have wanted a safe and easy way to pay individual contractors. Some of them prefer cash or paper checks (and their tax liabilities are their business), but an electronic payment is better for me. I'd feel better if the payment platform offered me a bit of protection (arbitration? just a standard contract?) if there was a dispute over the quality of the work. I think there's definitely a space for a trade payments platform. Best of luck with Kanda!
- RobKanda 6y ago
  One of the products Kanda hopes to bring to market soon is a secure holding account to arbitrate payments. You could pay electronically upfront into the account, letting the tradesperson know you can pay for the work, and the money would be released upon completion and once you are happy with the quality of their work
- taxidump 6y ago
  In the solar industry, lenders will cut off a contractor pretty quick if there are any issues. The amount of due diligence done by the lender is a pretty solid guarantee to the customer. Our dealer fees are between 21-30% of the total loan, but the term is usually 20-25 years long.
mrDmrTmrJ 6y ago
Really cool idea! I'm curious to hear how you're offering financing. If you're able to speak about this part of your business - are you using Stripe or another charter bank?
- RobKanda 6y ago
  We offer financing to the customers in two ways. Firstly, we offer a 0% finance package that allows the customer to split the cost over 10 months, bests suited to smaller jobs. For this, we're partnered with a bank. Secondly, for slightly larger jobs, we offer unsecured and secured personal loan finance
ryanSrich 6y ago
Interesting idea. I don’t know if this would apply to US (most home projects for fixing issues are relatively affordable), but I could see it working for maybe roofing (often very expensive).
- RobKanda 6y ago
  Whilst most home projects may be affordable, the average American has less than $1000 in their savings. A single project could leave their bank account wiped for months
  - anonuser123456 6y ago
    If you are a homeowner, you can tap a home equity line of credit for maintenance projects. Homeowners that can't get a HELOC because of credit issues are going to be a credit risk for the contractor.
    - pdanny95 6y ago
      We offer 0% financing, way more attractive than raising debt against your home
      - the_optimist 6y ago
        This seems directly disingenuous -- the up front fee is going to have to come out of the price, and is way, way more expensive than secured financing.
        pdanny95 5y ago
        The customer literally pays no fees. The tradesperson takes the hit and puts it down as a marketing fee. So, it's not more expensive.
    - monkeybutton 6y ago
      Everyone I know that has done major renovations has taken this approach for financing. What would be the advantage of going with Kanda rather than their own bank?
0xferruccio 6y ago
How are you able to provide financing? Do you have some sort of agreement with banks?
- RobKanda 6y ago
  We are partnered with a bank who have provided us a debt line to offer 0% finance to customers of our tradespeople
  - adav 6y ago
    What’s in it for the bank? By the way, there’s a misspelling “Downlaod” on your pricing page.
    - RobKanda 6y ago
      The bank makes commission on the 0% finance - we charge the tradesperson a 9% subsidy for any 0% finance agreement taken out, which includes the bank's fees. If the customer takes personal loan finance, then the bank charges them an APR instead. Thanks for the heads up on the spelling mistake! Slipped through review somehow!
anonuser123456 6y ago
Are you holding the risk of non-payment or does the contractor still own that risk?
- RobKanda 6y ago
  The risk of non-payment falls onto the bank we are partnered with. The finance agreement is between us (and the bank) and the customer, so the tradesperson is completely de-risked
  - anonuser123456 6y ago
    I could see contractors loving your service on that front. How do you plan to handle contract disputes? Mandatory arbitration?
    - RobKanda 6y ago
      We currently require our contractors to be associated with a regulatory body, who can inspect their work if a dispute arises. In the UK, this is mandatory anyway. The customer also signs a satisfactory notice on completion, and we encourage them to ensure they are happy with the work before signing the note
deleted 6y ago
[deleted]
endisneigh 6y ago
This is an interesting idea. Personally the issue hasn’t been financing because you can get outside financing to fund any renovations already. What I want is an intermediary that takes the money and acts as an escrow and only gives the contractor payment once observable metrics have been completed, e.g. bathroom was completed with permits pulled and inspection done by the city; 4/4 recessed lights installed per agreement, etc. In my experience the biggest issue for contractors and homeowners is one party not living up to their end of the agreement. In other words I want to be able to write a contract like code and want guarantees about what I’m paying for. If and when unexpected things happen they should’ve already been explicitly discussed in the contract.
- RobKanda 6y ago
  Whilst some outside financing is available, for the general contractor the ability to offer 0% finance just isn't there. Kanda provides these contractors the ability to offer this and compete with larger companies. Rather nicely, the agreements that both parties sign on our finance products actually achieve what you’re asking for: the customer signs a satisfactory note on completion of the work (assuming they’re happy) which allows the release of funds. For customers, however, we do know that an issue can be that work isn't completed to the standard you expect. One of the products Kanda hopes to bring to market soon is a secure holding account to arbitrate payments, allowing upfront payment with tranches released on milestones being completed, pretty much exactly as you've explained above, to hold both parties to agreements.
boulos 6y ago
Nice idea! It's kinda like Greensill et al. for smaller businesses. I'm a little confused about your economics though. Your pricing [1] is simple, but I'm a bit surprised that there isn't something that scales with volume. For example, I know banks and retailers commonly offer 0% interest over 10 months for direct customers, but that's with the hope of additional related business. Are you that "more business"? (it seems like maybe? Since some jobs are not interest free and the basic plan is also with interest). Alternatively, what does "9% subsidy instead of 11% on successful finance applications" means? (I was put off by the intercom chat widget wanting me to provide an email to watch your demo video. Sorry. I'm also not a potential customer). Is that where the risk premium gets included? I also get to repeat the patio11 meme: charge more. For 45 pounds a month at the top end, you've probably returned a small fortune to the business owner. Even just handling the quoting and receipt of payment part is a big deal! (Here in San Francisco, it can be hard to get an invoice from a contractor and even send them payment; we've had to follow up for months!). Tossing in Financing and support for cards (and do you mean "debit" or also "credit" cards; I know you're UK based, so the defaults are probably obvious to your audience, but I figured I'd ask). Either way, sounds like a big win for small shops! P.S. There's also a "Downlaod" typo in the first pricing column. [1] https://www.kanda.co.uk/pricing https://www.kanda.co.uk/pricing
- RobKanda 6y ago
  Hi, thanks for taking the time to look over the site and thanks for the feedback! Our base price for our subscription might seem cheap, but for tradespeople, whose margins might already be tight, its seen as a fair price for the quoting and invoicing features. The 9% or 11% subsidy we charge is on the quote total when the tradesperson offers 0% finance - if a customer took out a 0% loan for £1000, we would charge the tradesperson a £90 (or £110) subsidy for the finance package. If you’d like to see the demo video, here’s the link: https://www.youtube.com/watch?v=pVHBFHTNS90&ab_channel=Kanda https://www.youtube.com/watch?v=pVHBFHTNS90&ab_channel=Kanda For card processing, we actually support both debit and credit cards, though typically we process debit cards and have a subsidy charge for credit card processing, due to higher processing fees from the banks. We do think Kanda is a big win for the small guy - we put the power in their hands to compete with the big companies in the sector, offering finance products they couldn’t otherwise offer and winning more work for it
Super_Jambo 6y ago
If you get any kind of traction please start competing with Check-a-trade they're absolute hell for the consumer and I imagine not amazing for the contractors either. You'd be in a pretty good position for this given the view you'll have of contractors number of disputes and similar. Seems like an excellent idea to me, best of luck!
- RobKanda 6y ago
  Thanks! It's certainly a consideration we've had, we have the full history of the tradesperson through our site, and would have the same for customers, so a tradesperson would know if a customer is trust worthy as well! Win win for both sides of the equation
- pdanny95 6y ago
  lol checkatrade - read my mind
thaumasiotes 6y ago
> When he started to look into it he realized how unrealistic it would be for a little guy like him to be able to offer a pay-monthly option anytime soon. > Why? Because lenders put arbitrary barriers to entry like needing to have a yearly revenue of a $1M This seems incomplete. Why is it unrealistic to offer the option directly? As a small business, maybe you can't get a bank to lend your customers money so they can pay you the full amount up front. But you can lend your customers "money" so they can pay you monthly; this doesn't even involve a money transfer.
- RobKanda 6y ago
  Whilst you could maybe set up a monthly payment plan for your customers, that leaves you very exposed to them not paying. Assume you have three or four customers on a payment plan, and they decide not to pay, you could be out of money for the month, not be able to complete other jobs, etc. Also, there are legal obligations and restrictions in place for these types of agreements as well. With us, the tradesperson has no risk of non-payment. They are paid the full amount on completion.
  - edoceo 6y ago
    So, how do you deal with the risk of non-payment?
    - RobKanda 6y ago
      The bank we offer the finance through run full credit checks and assess the risk. Non-payment is only tied to our lending bank, the tradesperson isn't at risk. If the customer is a risk of non-payment, the bank will elect not to lend to them. For the tradesperson, we'll let them know if the customer has been rejected for finance, and they can choose to proceed with the work and hope the customer can pay them if they choose, or decide the customer isn't worth the risk
      - thaumasiotes 6y ago
        > If the customer is a risk of non-payment, the bank will elect not to lend to them. This seems a little glib. Everyone is a risk of non-payment. I have total confidence that over ten years of operation, there will be at least one occurrence of non-payment. If you're actually providing 0% financing -- you pay the tradesperson $X up front and collect $X over the next 24 months -- that would mean you start out being able to employ zero people, and even the most infinitesimal risk of non-payment immediately puts you in the red.
say_it_as_it_is 6y ago
Have you found contractors willing to accept an estimate from a remote estimation tool without seeing the job in person? They're sore about visiting just to provide an estimate yet also wouldn't dare give one based on photos or video. Another thing. Small business contractors have got to be the most dishonest people I've ever worked with. I've caught so many lies and frauds. Only reason I don't report them is because they'd kill me or destroy my property. I'm not going to entrust them with any personal information that they could use to overcharge me, charge me for other jobs, or associate me with any other scam jobs they're running. Be strong! You're going to be dealing with characters..
- RobKanda 6y ago
  One of the features we recently launched and have a good user base using is an estimator widget we host, specific to the contractor, that allows for estimation fo boiler installations. We're also working on an electrical installation one at the moment. These allow the homeowner to get a quick estimate without bothering the contractor, then select an option if they decide that's what they want, at which point the contractor is sent an email to arrange with the customer. We work with the contractors on these to ensure they're as accurate as possible, and priced as the contractor wants. In terms of the dishonesty, we believe that's a completely untrue and unfounded accusation. We have a very trust worthy base of users, who whenever an issue has been raised have been the first to jump at rectifying the situation. In our contractors eyes, customers can be the untrustworthy ones, not paying on completion, saying things aren't up to code when they are, accusing the contractor of property damage they didn't cause. We try not to discriminate.
  - sammyd56 6y ago
    A stark reminder to end users of any service that if you are not paying, you are the product. There is good reason that the sale of financial services through intermediaries is a highly regulated area: it takes a firm counter-force to stop businesses from exploiting customers when all the incentives are there, and there are enough links in the chain for plausible deniability.
hayksaakian 6y ago
any plans for a US release?
- pdanny95 6y ago
  yes - within next 18 months
donnythecroc 6y ago
This is great and I would expect most of the cost of the financing to be passed onto the customer. How did you give debt funders the reassurance to back your business as a startup?
barryhand 6y ago
Where is the proof/data for "Win 30% more jobs by offering monthly payments"?
Irongirl1 5y ago
May I ask a question? Re: "the secure holding account?" Does the UK have escrow as we do in the US? See Escrow.com for an example. Here, if we are ordering something from ebay as an example and it is expensive, then we can use sites like escrow.com to act as the secured party. Their site lists both an API and a Partners section. Perhaps you can offer that service sooner than you thought....
- pdanny95 5y ago
  we are building it ourselves because the fees are outrageous on escrow.com

79 points by RobKanda 6y ago

stormqloud 6y ago

This is highly country and legal environment dependant. Very difficult to scale. Often a tradesperson can secure a lien on a property as part of their permit for that job. If the tradesperson gets paid,then the security on the debt/loan is gone. In my own case of endless home renovation, a bigger issue is you have to front the workman etc the $$$ to buy the supplies/lumber/etc.

RobKanda 6y ago
Whilst the main concept itself is subject to local legal variations, the idea of contractors being able to make their jobs more accessible and more affordable to the average homeowner resonates around the world. What Kanda aims to do is to take this legal restriction minefield away from the contractors, so they can continue to do what they do best, whilst offering their customers an affordable payment plan. Securing a lien when doing smaller work, such as fitting a boiler or rewiring a house, is not ideal when you want to get paid as soon as the job is done. If the customer instead arranges finance with us, the payment can be immediately paid out and the contractor can continue on with their business without worrying if they will get reimbursed. Finally, the concept of fronting the money for the materials arises from the fear of the contractor not getting paid at all; if the job isn't paid for, at least the contractor won't be out of pocket. With us, the money is secured before the job starts. They don't need to worry about being out of pocket from a customer refusing to pay or being unable to pay.
- stormqloud 6y ago
  Fronting the money for the supplies usually comes from the fact the tradesperson went on a bender after you paid him last time! Also in the area where I live, most home trade jobs are done with as much cash as possible to avoid taxes. The pay cash tax savings is greater then any bank financing. When you pay 50% income taxes you can see that the incentive to work cash is much much greater then formal financing. If a car repair was going to cost $1000, the tradesperson keeps $500 after tax. He's better off to offer you $750 cash. Take $500 now (he's paid up). Then if he still collects the $250 cash that's pure bonus. I didn't even factor in the 20% sales taxes on the work the buyer would have to pay. All I can say is don't try to expand to a newly third world country like Canada. I just can't see it working here.
  - sterwill 6y ago
    I understand the desire to avoid paying tax by taking cash, but is it common that a tradesperson is paying 50% income tax? I only have a US resident's perspective, but that rate seems very high.

sterwill 6y ago

I haven't been in a position where I needed to finance work on my home, but I have wanted a safe and easy way to pay individual contractors. Some of them prefer cash or paper checks (and their tax liabilities are their business), but an electronic payment is better for me. I'd feel better if the payment platform offered me a bit of protection (arbitration? just a standard contract?) if there was a dispute over the quality of the work. I think there's definitely a space for a trade payments platform. Best of luck with Kanda!

RobKanda 6y ago
One of the products Kanda hopes to bring to market soon is a secure holding account to arbitrate payments. You could pay electronically upfront into the account, letting the tradesperson know you can pay for the work, and the money would be released upon completion and once you are happy with the quality of their work
taxidump 6y ago
In the solar industry, lenders will cut off a contractor pretty quick if there are any issues. The amount of due diligence done by the lender is a pretty solid guarantee to the customer. Our dealer fees are between 21-30% of the total loan, but the term is usually 20-25 years long.

mrDmrTmrJ 6y ago

Really cool idea! I'm curious to hear how you're offering financing. If you're able to speak about this part of your business - are you using Stripe or another charter bank?

RobKanda 6y ago
We offer financing to the customers in two ways. Firstly, we offer a 0% finance package that allows the customer to split the cost over 10 months, bests suited to smaller jobs. For this, we're partnered with a bank. Secondly, for slightly larger jobs, we offer unsecured and secured personal loan finance

ryanSrich 6y ago

Interesting idea. I don’t know if this would apply to US (most home projects for fixing issues are relatively affordable), but I could see it working for maybe roofing (often very expensive).

RobKanda 6y ago
Whilst most home projects may be affordable, the average American has less than $1000 in their savings. A single project could leave their bank account wiped for months
- anonuser123456 6y ago
  If you are a homeowner, you can tap a home equity line of credit for maintenance projects. Homeowners that can't get a HELOC because of credit issues are going to be a credit risk for the contractor.
  - pdanny95 6y ago
    We offer 0% financing, way more attractive than raising debt against your home
    - the_optimist 6y ago
      This seems directly disingenuous -- the up front fee is going to have to come out of the price, and is way, way more expensive than secured financing.
      - pdanny95 5y ago
        The customer literally pays no fees. The tradesperson takes the hit and puts it down as a marketing fee. So, it's not more expensive.
  - monkeybutton 6y ago
    Everyone I know that has done major renovations has taken this approach for financing. What would be the advantage of going with Kanda rather than their own bank?

0xferruccio 6y ago

How are you able to provide financing? Do you have some sort of agreement with banks?

RobKanda 6y ago
We are partnered with a bank who have provided us a debt line to offer 0% finance to customers of our tradespeople
- adav 6y ago
  What’s in it for the bank? By the way, there’s a misspelling “Downlaod” on your pricing page.
  - RobKanda 6y ago
    The bank makes commission on the 0% finance - we charge the tradesperson a 9% subsidy for any 0% finance agreement taken out, which includes the bank's fees. If the customer takes personal loan finance, then the bank charges them an APR instead. Thanks for the heads up on the spelling mistake! Slipped through review somehow!

anonuser123456 6y ago

Are you holding the risk of non-payment or does the contractor still own that risk?

RobKanda 6y ago
The risk of non-payment falls onto the bank we are partnered with. The finance agreement is between us (and the bank) and the customer, so the tradesperson is completely de-risked
- anonuser123456 6y ago
  I could see contractors loving your service on that front. How do you plan to handle contract disputes? Mandatory arbitration?
  - RobKanda 6y ago
    We currently require our contractors to be associated with a regulatory body, who can inspect their work if a dispute arises. In the UK, this is mandatory anyway. The customer also signs a satisfactory notice on completion, and we encourage them to ensure they are happy with the work before signing the note

deleted 6y ago

[deleted]

endisneigh 6y ago

This is an interesting idea. Personally the issue hasn’t been financing because you can get outside financing to fund any renovations already. What I want is an intermediary that takes the money and acts as an escrow and only gives the contractor payment once observable metrics have been completed, e.g. bathroom was completed with permits pulled and inspection done by the city; 4/4 recessed lights installed per agreement, etc. In my experience the biggest issue for contractors and homeowners is one party not living up to their end of the agreement. In other words I want to be able to write a contract like code and want guarantees about what I’m paying for. If and when unexpected things happen they should’ve already been explicitly discussed in the contract.

RobKanda 6y ago
Whilst some outside financing is available, for the general contractor the ability to offer 0% finance just isn't there. Kanda provides these contractors the ability to offer this and compete with larger companies. Rather nicely, the agreements that both parties sign on our finance products actually achieve what you’re asking for: the customer signs a satisfactory note on completion of the work (assuming they’re happy) which allows the release of funds. For customers, however, we do know that an issue can be that work isn't completed to the standard you expect. One of the products Kanda hopes to bring to market soon is a secure holding account to arbitrate payments, allowing upfront payment with tranches released on milestones being completed, pretty much exactly as you've explained above, to hold both parties to agreements.

boulos 6y ago

Nice idea! It's kinda like Greensill et al. for smaller businesses. I'm a little confused about your economics though. Your pricing [1] is simple, but I'm a bit surprised that there isn't something that scales with volume. For example, I know banks and retailers commonly offer 0% interest over 10 months for direct customers, but that's with the hope of additional related business. Are you that "more business"? (it seems like maybe? Since some jobs are not interest free and the basic plan is also with interest). Alternatively, what does "9% subsidy instead of 11% on successful finance applications" means? (I was put off by the intercom chat widget wanting me to provide an email to watch your demo video. Sorry. I'm also not a potential customer). Is that where the risk premium gets included? I also get to repeat the patio11 meme: charge more. For 45 pounds a month at the top end, you've probably returned a small fortune to the business owner. Even just handling the quoting and receipt of payment part is a big deal! (Here in San Francisco, it can be hard to get an invoice from a contractor and even send them payment; we've had to follow up for months!). Tossing in Financing and support for cards (and do you mean "debit" or also "credit" cards; I know you're UK based, so the defaults are probably obvious to your audience, but I figured I'd ask). Either way, sounds like a big win for small shops! P.S. There's also a "Downlaod" typo in the first pricing column. [1] https://www.kanda.co.uk/pricing https://www.kanda.co.uk/pricing

RobKanda 6y ago
Hi, thanks for taking the time to look over the site and thanks for the feedback! Our base price for our subscription might seem cheap, but for tradespeople, whose margins might already be tight, its seen as a fair price for the quoting and invoicing features. The 9% or 11% subsidy we charge is on the quote total when the tradesperson offers 0% finance - if a customer took out a 0% loan for £1000, we would charge the tradesperson a £90 (or £110) subsidy for the finance package. If you’d like to see the demo video, here’s the link: https://www.youtube.com/watch?v=pVHBFHTNS90&ab_channel=Kanda https://www.youtube.com/watch?v=pVHBFHTNS90&ab_channel=Kanda For card processing, we actually support both debit and credit cards, though typically we process debit cards and have a subsidy charge for credit card processing, due to higher processing fees from the banks. We do think Kanda is a big win for the small guy - we put the power in their hands to compete with the big companies in the sector, offering finance products they couldn’t otherwise offer and winning more work for it

Super_Jambo 6y ago

If you get any kind of traction please start competing with Check-a-trade they're absolute hell for the consumer and I imagine not amazing for the contractors either. You'd be in a pretty good position for this given the view you'll have of contractors number of disputes and similar. Seems like an excellent idea to me, best of luck!

RobKanda 6y ago
Thanks! It's certainly a consideration we've had, we have the full history of the tradesperson through our site, and would have the same for customers, so a tradesperson would know if a customer is trust worthy as well! Win win for both sides of the equation
pdanny95 6y ago
lol checkatrade - read my mind

thaumasiotes 6y ago

> When he started to look into it he realized how unrealistic it would be for a little guy like him to be able to offer a pay-monthly option anytime soon. > Why? Because lenders put arbitrary barriers to entry like needing to have a yearly revenue of a $1M This seems incomplete. Why is it unrealistic to offer the option directly? As a small business, maybe you can't get a bank to lend your customers money so they can pay you the full amount up front. But you can lend your customers "money" so they can pay you monthly; this doesn't even involve a money transfer.

RobKanda 6y ago
Whilst you could maybe set up a monthly payment plan for your customers, that leaves you very exposed to them not paying. Assume you have three or four customers on a payment plan, and they decide not to pay, you could be out of money for the month, not be able to complete other jobs, etc. Also, there are legal obligations and restrictions in place for these types of agreements as well. With us, the tradesperson has no risk of non-payment. They are paid the full amount on completion.
- edoceo 6y ago
  So, how do you deal with the risk of non-payment?
  - RobKanda 6y ago
    The bank we offer the finance through run full credit checks and assess the risk. Non-payment is only tied to our lending bank, the tradesperson isn't at risk. If the customer is a risk of non-payment, the bank will elect not to lend to them. For the tradesperson, we'll let them know if the customer has been rejected for finance, and they can choose to proceed with the work and hope the customer can pay them if they choose, or decide the customer isn't worth the risk
    - thaumasiotes 6y ago
      > If the customer is a risk of non-payment, the bank will elect not to lend to them. This seems a little glib. Everyone is a risk of non-payment. I have total confidence that over ten years of operation, there will be at least one occurrence of non-payment. If you're actually providing 0% financing -- you pay the tradesperson $X up front and collect $X over the next 24 months -- that would mean you start out being able to employ zero people, and even the most infinitesimal risk of non-payment immediately puts you in the red.

say_it_as_it_is 6y ago

Have you found contractors willing to accept an estimate from a remote estimation tool without seeing the job in person? They're sore about visiting just to provide an estimate yet also wouldn't dare give one based on photos or video. Another thing. Small business contractors have got to be the most dishonest people I've ever worked with. I've caught so many lies and frauds. Only reason I don't report them is because they'd kill me or destroy my property. I'm not going to entrust them with any personal information that they could use to overcharge me, charge me for other jobs, or associate me with any other scam jobs they're running. Be strong! You're going to be dealing with characters..

RobKanda 6y ago
One of the features we recently launched and have a good user base using is an estimator widget we host, specific to the contractor, that allows for estimation fo boiler installations. We're also working on an electrical installation one at the moment. These allow the homeowner to get a quick estimate without bothering the contractor, then select an option if they decide that's what they want, at which point the contractor is sent an email to arrange with the customer. We work with the contractors on these to ensure they're as accurate as possible, and priced as the contractor wants. In terms of the dishonesty, we believe that's a completely untrue and unfounded accusation. We have a very trust worthy base of users, who whenever an issue has been raised have been the first to jump at rectifying the situation. In our contractors eyes, customers can be the untrustworthy ones, not paying on completion, saying things aren't up to code when they are, accusing the contractor of property damage they didn't cause. We try not to discriminate.
- sammyd56 6y ago
  A stark reminder to end users of any service that if you are not paying, you are the product. There is good reason that the sale of financial services through intermediaries is a highly regulated area: it takes a firm counter-force to stop businesses from exploiting customers when all the incentives are there, and there are enough links in the chain for plausible deniability.

hayksaakian 6y ago

any plans for a US release?

pdanny95 6y ago
yes - within next 18 months

donnythecroc 6y ago

This is great and I would expect most of the cost of the financing to be passed onto the customer. How did you give debt funders the reassurance to back your business as a startup?

barryhand 6y ago

Where is the proof/data for "Win 30% more jobs by offering monthly payments"?

Irongirl1 5y ago

May I ask a question? Re: "the secure holding account?" Does the UK have escrow as we do in the US? See Escrow.com for an example. Here, if we are ordering something from ebay as an example and it is expensive, then we can use sites like escrow.com to act as the secured party. Their site lists both an API and a Partners section. Perhaps you can offer that service sooner than you thought....

pdanny95 5y ago
we are building it ourselves because the fees are outrageous on escrow.com