Factored
Behind the Idea Proptech

Behind the Idea: Factored

In the real estate and property management sector, a persistent problem has long plagued landlords: the inherent challenge of irregular rental income.

Landlords frequently grapple with immediate financial needs, essential property improvements, investment prospects, and the aspiration to enhance the quality of tenant living.

Factored, a company founded by David Rabee and Ben Schuldenfrei, offers a pragmatic solution – it connects landlords with funding in order to invest in improving their properties.

In this week’s Behind the Idea, we hear from Schuldenfrei about Factored’s mission and paving the way for a more financially stable and environmentally responsible future in property management.

Ben Schuldenfrei, co-founder, Factored
Ben Schuldenfrei, co-founder, Factored
Tell us more about your company and its offering

Factored empowers landlords to tap into future rental income to fund property improvements that will cut carbon emissions and improve tenant wellbeing. Our platform allows landlords to advance up to £15,000 of rent, which can be paid back in manageable monthly instalments over six to 18 months. The advances are typically used for refurbishments and property energy-efficiency retrofitting.

But while we can work alongside traditional financing, the primary differentiator between our service and the average bank loan is that we act quickly and are more inclusive. Rather than working to fixed criteria, we look at individual circumstances, which means that we can help more landlords access funding. We don’t rely on hard credit checks. And we don’t levy unnecessary or unfair fees, such as early repayment fees.

What problem was your company set up to solve?

The idea behind Factored was to tackle the issues of energy inefficiency and more maintenance in private rental properties. Last year, less than half of private rental homes in England had an energy efficiency rating of A to C. And according to the English Housing Survey , 23 per cent of rentals did not meet the decent home standard in 2021 to 22. This is bad for landlords, tenants and the planet.

But the reason behind these figures isn’t apathy or lack of interest. More often than not, the single biggest barrier to solving this is the upfront cost needed for works. Factored was built to allow landlords to access capital by selling future rental income, allowing them to invest in refurbishments that enhance tenant living conditions and make improvements to the property that are better for the environment.

 Since launch, how has your company evolved?

Our business hasn’t evolved as such. Once we formed the idea behind Factored, we knew that we needed to fill in the market, so our primary focus so far has been realising the business’s potential.

We started by raising VC and angel funding, and from there, we hired a team to build our product. Post-launch, we generated significant traction in the market, demonstrating the clear need for our finance. So, rather than evolving, so far, we’ve been realising our vision.

What has been the biggest challenge or most ‘tricky moment’ to overcome?

Our greatest challenge is probably fairly enviable – demand was greater than anticipated. This meant that we weren’t, initially, prepared for the number of customers who wanted to use Factored’s services. We had to significantly improve our platform and underwriting process for scale in a relatively short time frame.

What are your biggest achievements or ‘proudest moment’ so far?

I think all businesses would agree that there’s nothing more exciting than closing your first customer. After all the hard work that went into making Factored a reality, that felt like a really big deal.

Raising equity funding during a particularly difficult market is also something to be proud of. The fact that we achieved this – and so quickly – isn’t only a source of pride, but seeing that investors could appreciate the potential and value of Factored, massively boosted our faith in our product.

We also pitched live on stage in Helsinki in the finals of the Slush 100 competition. We made it through to the final 20 of over 1,000 applicants, which again helped enhance our confidence and was a real achievement to be proud of.

How would you describe the culture of your company?

Factored is customer-driven. We have a customer-first approach to everything. This comes through in the fact that we seek to build things that people need. But it also shapes how we function – there’s no point in creating products that are needed if we can’t provide the service to make the customer experience as seamless as possible.

That said, we’re also an extremely nimble company. With Factored, we wanted to launch quickly, gather feedback, and continuously iterate. We’ve built that mentality into the foundations of the business. While we want to craft the perfect products and services, that can only be done with customer feedback. So, internal pontification isn’t for us.

What’s in store for the future?

Our primary focus for Factored right now, is scaling. While we may look at developing other products in the future, 2024 is about getting our current product to as many people as possible and delivering it in the best possible way.

Factored empowers landlords to access capital from their future rental income, allowing them to significantly enhance tenant living standards and drastically reduce carbon emissions from their rental properties.

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