Not being paid for a job is a big problem Australia’s tradies have to contend with all too often and it’s something new Aussie startup CheckVault wants to stop.
Last financial year the Australia Security and Investment Commission found 9,500 Australian businesses had been listed as insolvent, racking up losses of close to $7 billion
Construction is one industry which has been particularly affected by this, making up nearly a quarter of the companies which have become insolvent in the past year.
CheckVault founder, Kieran Martin, a former chartered accountant, saw the issue first-hand with his clients and it prompted him to launch his startup.
He said one of the biggest causes for companies becoming insolvent were late or unpaid invoices.
“As the figures highlight, there is a clear issue with facilitating payments across SMEs,” he said.
Founded in 2012 and launched in Australia this week after two years of testing, CheckVault acts as an escrow service. A tradie submits a quote for a job, and the payment is held by CheckVault via an escrow arrangement it has struck with ANZ and Perpetual Corporate Trust until the work is complete. The funds are only released when both parties are satisfied.
By acting as an independent third party, funds can be released directly to the supplier in just a few clicks.
“Now not only can the supplier get on with the job safe in the knowledge that funds have already been held for them, but customers can even take advantage of the knock-on competitive pricing that this security provides. It’s a win-win for both parties,” Martin said.