4 Tips for Commercial Lenders to Get Ahead of the Competition

4 tips for commercial lenders to get ahead of the competition

Bank Statement Integration: Revolutionizing Cash Flow Analysis with FlashSpread

New technologies are transforming standard processes and practices across industries for commercial lenders. This includes the financial services industry, which other businesses sometimes utilize for funding by way of commercial loans. 

A large part of the financial industry’s digital transformation involves an increase in online lending. Online lending has enabled business owners to shop around for loans and has also led to expect quick responses and convenience. At any given time, there may be three to five lenders looking at the same deal.

With so many lenders competing for customers,  what can lenders do to stand out?

Digitize Origination 

Lenders need to offer all-digital loan origination. This doesn’t mean there’s no human involvement or personal touch, but gone are the days when business owners have to fill out a contact request or download and send a fillable PDF form just to start the application process. 

Borrowers have options for funding and they’ll value lenders that offer speed and convenience when they are shopping for rates and terms. By implementing a smart all-digital application, you can enable prospects to easily interact and securely collect the information required to keep the deal moving. 

Moreover, implementing a digital loan origination system (LOS) opens a direct connection to borrowers, accounting systems and bank accounts. The seamless and secure synchronization of these systems allow lenders to extract and analyze information instantly. The convenience digital lending solutions provide will help your organization outshine the competition.

Shorten the Lending Cycle

In a recent Federal Reserve Small Business Credit Survey, business owners claimed they were most dissatisfied with wait times for credit decisions from banks and other commercial lenders. This has identified an opportunity for lenders that offer online products. 

The survey showed a 24% increase in online lending across all lending categories in 2017 over the prior year and each year it has been growing. Further, 40% of businesses applied to online lenders—nearly the same share that applied to large banks (49%) and small banks (47%). 

To compete, commercial lenders should take advantage of underwriting technology that accelerates deals. Digital solutions are now able to automatically access third party data providers for immediate results on applications, provide financial analysis, alert your team to missing or incomplete information and automatically file UCC’s. Underwriters can get an overall picture of a borrower in minutes, freeing them from busy work and providing them time to assess risk and make a faster decision.

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Implementing electronic signatures, or eSignatures, into your agreements and contracts facilitates faster closing. Commercial lenders can choose from many eSignature systems now available or look for a technology partner that incorporates an eSignature solution. 

Electronic signatures are legally binding, and offer timestamps and identity information. They also enable lenders to streamline account openings, document routing and approvals, and increase transparency and efficiency. 

Moreover, electronic signatures prevent the hassles and inefficiencies of signing documents, giving lenders time to focus on relationship-building.

Leverage Advanced Analytics Tools for Commercial Lenders

Analytics tools offer higher advance rates to better compete and win clients. Traditionally, receivables finance companies advance about 80-85%, even though they could advance more depending on the client’s receivables structure and collections history. 

Analytics tools will allow effective analysis and prediction dilution to be more competitive on advance rates. Some areas of the industry, such as freight factoring, are already doing this on an invoice basis, but this can also be done in other sectors with better analytics. 

Traditional lenders have many tools at their disposal to help them win more customers. Digital solutions built to streamline origination tasks not only delight your borrowers but enable your team to originate and service more loans, faster. 

FlashSpread is an innovative financial spreading software that enables commercial lenders to spread a company’s financial data instantly. Using optical character recognition and intelligent API’s, the FlashSpread platform scans tax returns and generates accurate and comprehensive reports on cash flow analysis, debt-to-income (DTI) ratios and more. Furthermore, FlashSpread automates compliances with ever-changing federal financial regulations to make servicing loans fast and easy. Learn more about what FlashSpread can do for your organization by scheduling a free demonstration today.