In today's competitive landscape, small businesses are a driving force for innovation and job creation and financial institutions have a crucial role to play in their success. Yet many financial institutions are missing out on these valuable opportunities due to outdated and inefficient underwriting processes specifically for small business borrowers.
It’s not a stretch to say that the traditional small business loan application process is cumbersome and time-consuming, both for the borrower and the lender. Paperwork piles up, information gets siloed, communication slows and decisions take an eternity. Small businesses are accustomed to experience an outdated lending process that is decades behind the digital-only consumer lending experience. This simply doesn't align with the fast-paced needs of the millions of small businesses seeking capital. These borrowers need access to capital quickly and efficiently to seize opportunities and navigate challenges.
Here's how your current underwriting process might be costing you valuable business:
- Slow Turnaround Times: Small businesses need decisions fast. If your process takes weeks, or even months, these borrowers will likely move on to a competitor who can offer a faster answer.
- Frustration and Friction: Tedious applications, mountains of paperwork and lack of transparent and timely communication create a negative experience for borrowers. This can damage your brand and deter future applicants.
- Inefficient Resource Use: Underwriting and other teams get bogged down in manual tasks like data entry and document chasing. This diverts their attention from building relationships and providing valuable guidance to borrowers.
- Limited Ability to Serve Markets: Rigid underwriting criteria might exclude promising businesses that don't fit the traditional mold. This narrows your pool of potential loan customers.
There's a better way for your institution to do small business lending. By embracing technology and streamlining your underwriting process, you can unlock key benefits:
- Faster Approvals: Leverage automation and data analytics to expedite the decision-making process, getting capital into the hands of the borrowers you want to reach.
- Enhanced Borrower Experience: Offer a user-friendly online application process, digital document upload capability, fast KYB credit checks and provide real-time updates on the status of the borrower’s application.
- Empowered Underwriting Teams: When you underwriters have the right information to make informed and fast decisions, you free your team from tedious tasks and empower them to focus on building relationships and providing personalized support to borrowers.
- Expand Your Reach: Utilize data-driven risk assessment models to evaluate a wider range of businesses, opening doors to new and exciting niche markets and cross-selling opportunities. And with rules-based decisioning you can easily set thresholds for your level of approval risk.
Don't let your underwriting process be a barrier to growth. Partner with Rapid Finance to implement a loan origination system that streamlines the process, improves efficiency and empowers your financial institution to capture the full potential of the small business lending market.