Risk & underwriting

The merchant is in the room and you are not

Every structural problem in point-of-sale home-improvement lending follows from this one fact.

July 11, 2026  ·  The Renny team

Point-of-sale lending in home improvement has a structural asymmetry that no amount of good faith removes. The contractor is at the kitchen table with the borrower. The lender is not. Whatever the contractor writes down becomes the record, and the contractor is the party whose payment depends on it.

This is not an accusation about contractors. Most are honest operators running a hard business on thin margins. It is an observation about incentives and information, and it holds regardless of anyone's character.

What follows from it

• The lender's file and the merchant's account are the same account, written once, by the merchant.
• A borrower disputing the work is disputing a record they did not create and often have not seen.
• The lender learns about a problem when the borrower complains — which is to say, late.
• Patterns across merchants are invisible, because each file is only ever examined on its own.

Every public enforcement action in this market is, at bottom, a consequence of that list.

The fix is not more diligence at onboarding

Onboarding diligence is necessary and insufficient. It tells you about a business as it was on the day you checked. It says nothing about what happened at the kitchen table last Tuesday.

What closes the asymmetry is a second independent record created at the moment of the transaction, by the other party, that the merchant cannot author or amend. That is what a borrower attestation is — not a formality, but the only piece of evidence in the file whose source is not the party being paid.

The borrower's signature is the only line in the file that the party getting paid did not write.

Why it has to be independent, not just present

A borrower signature collected by the contractor, on the contractor's device, from a document the contractor assembled, is not independent. It has the form of corroboration without the substance.

Independence means the borrower authenticates as themselves, sees a document neither party can alter afterwards, and signs into a system where the identity of the signer comes from their session rather than from a field somebody filled in. Anything short of that leaves you with one record wearing two signatures.