Matt’s Building Materials launches financing program for Valley home builders

A longtime regional hardware business is launching a new partnership with a local alternative lender to help home builders secure funding as transitional loans become harder to obtain. 

The owners of Matt’s Building Materials recently inked a deal with Capital Insiders to finance entire residential construction projects across the Rio Grande Valley. 

It’s not the first time Matt’s Building Supply has gotten into the credit business; they often sell builders’ materials on credit and sell credit cards too, but this would enable entire homes to be financed quickly. 

“We’ve always had credit for builders, the lumber, drywall, roofing, and doors, the building blocks for a home, but we’ve never provided interim financing, which is for the whole job,” said Isaac Smith, co-owner of Matt’s Building Supply. 

Now, even the cost of labor to construct the building can be borrowed through Capital Insiders, the alternative financing company owned by Emiliano Zapata. 

Matt’s has been an investor in Capital Insiders, and the deal is a cross-pollination partnership. 

“Builders are the heartbeat of our communities,” Emiliano Zapata, CEO of Capital Insiders, said in a news release. “We’re ensuring they have both the financial backing and material support needed to move forward with confidence.”

Capital Insiders is an asset-based lender, and instead of using traditional bank underwriting, they consider a builder’s experience in the field. Zapata himself ran a construction company for three decades.

Most banks finance only up to 80% of commercial loans, while private lenders offer more flexible terms, such as 100% financing. With that flexibility comes a higher overall cost. Private lenders may charge a 13% interest rate rather than an 8% interest rate at a bank, and instead of a lump sum, the money is drawn out over time as the project is completed. 

Demand for construction material has declined in recent months as U.S. Immigration and Customs Enforcement raids have stalled projects and created a labor shortage, Smith said.

“But for the most part, the Valley has been a pretty strong market. There’s a lot of growth,” Smith said. “There’s a bump in the road. ICE is putting some pressure on the labor force and creating some shortages in the market.”