Michael McFadden

Michael McFadden, founder of Relay AI, presents a fintech solution to one of construction's most persistent problems: cash flow. Relay works with main contractors to pay approved claims early, the sub pays a small fee, the main contractor gets a cashback incentive, and money moves faster through the supply chain. The conversation is frank about the reality of late payments: Andy shares his own struggle with an overdue invoice from November (it's now March), and Michael explains that cash flow crises are often the "last step" in construction company collapses. Future roadmap includes retentions visibility and progress claims standardisation. A surprisingly practical episode about the plumbing of construction finance.

Key Topics Discussed

• Cash flow as timing mismatch. "Cash is king." Subcontractors give 30-60 days of interest-free credit to clients. Main contractors pay claims at month-end while subbies have bills due mid-month. Dormant funds sitting in call accounts earning almost nothing.
• Relay AI model. Main contractors set aside funds for approved claims. Subbies can opt for early payment (pay a fee, e.g., $200 on a $10K invoice). Main contractors get cashback. Fully optional, can wait for normal payment terms. No debt, no application fees, no financing. "Push button, get paid."
• Construction company collapses. Cash flow is the "last step" in collapses. Often happens during boom times when operators take on more work, more risk, more complexity. Edenbrook and recent Wellington collapse cited.
• Subcontractor reluctance. Subbies reluctant to ask for early payment even when they need it. During COVID, most main contractors made effort to pay faster. Some subbies physically sit in contractor's waiting room until they get paid.
• Andy's personal struggle. Overdue invoice from November, hates admin of chasing payments, uses ChatGPT to draft chase emails. "I don't like chasing them up. It's very uncomfortable."
• Small business reality. Operators doing accounts on kitchen table. No CFO, no overdraft. When they need cash, borrow against the house. "Everyone who starts a business got in to do what they love, not for paperwork and admin."
• Future roadmap. Retentions visibility (every main contractor asks about it), progress claims standardisation (all in different formats, massive room for improvement), and API integration with existing construction management systems.

Notable Quotes

• Michael: "Cash flow is the last step in the collapse of construction companies."
• Michael: "Push button, get paid, that's the goal."
• Michael: "What's it worth to get your customer to pay you today rather than at the end of the month?"
• Michael: "Subcontractors are reluctant to ask for early payment."
• Andy: "I don't like chasing them up. It's very uncomfortable for me to even draft that email."

Guest Background

Michael McFadden has a background in IT and payments/financial services (including contracting in London). Founded Relay AI ~3 years prior to recording, focused on solving the cash flow problem for small businesses, initially broad then focused on construction after recognising the severity of the problem. The platform automates early payment of approved claims between main contractors and subcontractors.