Jan 2, 2021 · 29m · top-founders
Billd Construction Fintech Lends $100m to Subcontractors, Makes 12%+ Spread
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this interview with Nathan Latka, Billd founder and CEO Chris Doyle explains how the construction fintech company achieved a $100 million annual origination run rate by financing material purchases for subcontractors. Doyle breaks down the company's capital velocity, project-based underwriting, unit economics, and upcoming equity fundraising plans.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 30.3% of the talking time here. How this is scored →
Nathan as informed peer 5.4 Guest teaching 3.0 Guest disagreement 1.3 Nathan pushing back 2.7
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 25:02 Doyle counters on facility advance rates
When Latka asserts a 90-95% advance rate is already standardly high, Doyle firmly insists that strict covenant restrictions make flexible mezzanine capital essential.
Hardest push from Nathan ▶ 16:40 Latka challenges debt pricingLatka pushes back against Doyle's high cost of capital, arguing his proven loan tape should easily secure senior debt at 6-7%.
Biggest teaching moment ▶ 17:40 Doyle breaks down senior vs mez debt tranchesDoyle educates Latka on the blended debt structure, clarifying that while senior capital is cheap, the mezzanine layer at mid-teens rates inflates the blended cost.
Nathan holds their own ▶ 12:22 Latka calculates capital velocity IRRLatka demonstrates sharp financial modeling on the fly, correctly calculating that 3x annual capital turnover elevates their 10-12% spread to a 40%+ IRR.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Chris Doyle's Background and Billd's Inception | 5 | 2 | 1 | 2 | Latka probes Doyle on his background and the business mechanics of Billd, equating their loan recycling model and usage-based monetization to SaaS platforms like Twilio and SendGrid. | |
| Subcontractor Scale and Vertical Underwriting Strategy | 4 | 3 | 1 | 2 | Latka digs into the active borrower count and origination run rate, prompting Doyle to explain their vertical project-specific underwriting strategy rather than broad pre-approvals. | |
| Unit Economics and Project-Based Underwriting | 5 | 3 | 1 | 2 | Latka constructs a roleplay hypothetical of a contractor purchasing a pallet of lumber to trace cash flow timelines, warehouse costs, and project-based underwriting. | |
| Net Spreads, Default Rates, and Pandemic Resilience | 6 | 3 | 1 | 3 | Latka actively calculates annualized IRR returns based on capital recycling cycles, prompting Doyle to validate the spread and detail exceptionally low default rates compared to peers like Kabbage. | |
| Debt Capital Structure and Mezzanine Optimization | 7 | 4 | 2 | 4 | Latka challenges Doyle on why his blended debt cost is not lower given the track record. Doyle explains the bifurcated senior and mezzanine facility mechanics. | |
| Invoice Audit Savings and Engineering Structure | 4 | 3 | 1 | 2 | Doyle shares operational details about reviewing invoices for supplier billing mistakes and tax exemptions to pass savings to contractors, while outlining his engineering staff setup. | |
| Fundraising Strategy and Capital Efficiency | 7 | 3 | 2 | 4 | Latka probes future fundraising targets, dilution expectations, and valuation, while pitching his own potential debt facilitation. Doyle maintains grounded valuation expectations. |
Statements from this episode (19)
Chris Doyle: Billd turns over its loan capital three times annually
“Relative to other lenders, very, very low balance at any given time because we churn it three times a year. So in any kind of big, like broader economic effect, we could just shut down originations. Three months later, we have zero balance.”
Chris Doyle: Billd has roughly 350 active subcontractor borrowers
“Yeah between, probably about 350 right now.”
Chris Doyle: Billd originates roughly $8 million in loans per month
“So we're, you know, we're probably doing around eight million a month right now.”
Chris Doyle: Billd customers average $350,000 in annual material purchases
“So we're focused on that because each customer really is probably, you know, we don't know cause we don't have the full lifetime cycle of data, but you know, around 350,000 of purchases per customer which is great, right? And that's from an annual standpoint.”
Chris Doyle: Billd finances 90% to 95% of deals through debt
“Yeah, so we're borrowing, you know, we have a debt facility to borrow we, you know, 90, 95% of the deal, then we have a, we basically make money on that spread.”
Chris Doyle: Billd nets ~10% spread on low-teens warehouse facility
“Yeah, it's our warehouse facility, so kind of fully baked in the low teens. So, you know, take that, let's call it 10% cost, 20% income, so you have a net 10, right? And that's very, very different than any kind of consumer lending, and probably different than…”
Chris Doyle: Billd gives 3x typical limits via project-based underwriting
“Our performance of these dramatically exceeds any other lender because of the way we underwrite and the way we establish limit. We can give, you know, three X the limit because we have a process that says, what do you, it's not about the person buying the lumb…”
Chris Doyle: Billd finances up to $500,000 in materials per project
“We're doing 50,000, 100,500 thousand dollars worth of material purchases for a single project.”
Chris Doyle: Billd's actual lending spread is closer to 12%
“It is higher than the 10. It's probably closer to 12.”
Chris Doyle: Other small business lenders see 10% to 20% annual losses
“Sub three percent in small business lending. I mean, you're talking about 10 to 20% annual losses for some of these other lenders.”
Chris Doyle: Billd records full loan origination volume as revenue
“We'll probably, well, we actually take the whole thing as revenue. The whole origination. And the reason we do that is because it's an installment sale. So we purchase the material and resell it to the contractor”
Chris Doyle: Billd grew loan volume 400% annually
“We've been growing like 15% month over month with, you know, rolls up to about 400% annually.”
Chris Doyle: Billd raised $50M in debt and $10M in equity
“So we raised 50, we did 50 on the debt side, 10 on the equity”
Chris Doyle: Raising debt is more difficult and time-consuming than equity
“It's act to me, it's actually more difficult and time consuming to go out and raise debt because you go through the whole to do, then it's like, okay, we're almost ready to start letting you use it. And it's like, ah, well, this other thing. And it's like, you…”
Chris Doyle: Billd pays mid-teens interest rate on mezzanine debt
“Senior is cheaper. And then the mess is at a fixed rate in the middle teens.”
Chris Doyle: Billd's reseller model grants more legal rights than credit
“There's some like secret sauce there on the way we do the transaction between the purchasing from the supplier and reselling that gives us some in construction vertical specifically that, that gives us more rights than kind of unsecured, you know, here it is.”
Chris Doyle: Construction supplier invoices frequently contain auditable errors
“There's lots of, I'm just going to say mistakes in the billing and nothing intentional from the supplier side, but there's a lot of room there. It doesn't take long to train somebody how to pick those up. So we do that and we train our team and they review the…”
Chris Doyle: Billd operates with just one in-house software engineer
“We only have one engineer on staff. We have about seven engineers that we use let's see, Four or five of those overseas and then about three locally. And we manage three outsource dev shops and we balance the three on, on who we kind of want to use for whateve…”