Fostering Collaboration Between Lending & Credit Teams

Commercial Lending

Streamlining your commercial lending processes is all about providing the prospective borrower with a decision and closing the deal as quickly as possible. However, traditional banks can often take more than a month to process and close a typical commercial real estate loan. If the prospective borrower doesn’t get a decision fast enough, there are plenty of other lenders to choose from that will provide the timely decisioning they expect in today’s on-demand economy.

The ultimate goal is to increase lending productivity without adding additional employees, while improving the commercial borrower experience and ensuring that credit quality remains strong.

Simply throwing faster credit analysis and auto-decisioning technology at the problem isn’t enough. The technology must also foster more productive and efficient collaboration across teams, especially between lending and credit departments. This is the secret to a truly optimized commercial lending process.

 Democratize Access to Data

One of the most impactful ways to foster easier collaboration among team members is by democratizing access to the right data. Lending and credit departments need access to data, often the same data from various systems, including the core, the customer relationship management (CRM) system, deposit and exposure systems, financial statement spreading systems and scoring systems. If a loan officer must enter the same information multiple times and then, credit analysts must re-enter the same information, the lending process will take much longer than necessary.

Think of the capacity you would create if you eliminated the requirement to re-enter the same data multiple times. Beyond adding hours to the origination process, this also increases the chance of human error. One typo could derail the entire loan package.

An applicant’s information should only have to be captured once, then automatically flow to all other appropriate systems. The banks that are maximizing their commercial lending capacity are maximizing their use of data. Core, CRM, deposit data and more can all be leveraged within an institution’s commercial origination system to support swift and sound credit decisions.

Make It Easy for Everyone to Comply with Credit Policy

In today’s regulatory environment, it is essential that all members of all teams are in lockstep with credit and compliance policies. Tools like the Banker Hill NextGenÒ Banker Application can support this.

New technology can enable financial institutions to configure loan application flows and data requirements for credit and other loan products. This ensures that all team members, no matter their experience level, can guide borrowers to the right credit products and submit complete loan requests with all the information necessary to process the loan.

For example, if a prospective borrower starts asking detailed questions about collateral requirements for a business loan, staff-facing technology can help employees address those inquiries with confidence and advise which product would be the best fit based on the borrower’s needs. Additionally, this minimizes the risk of errors or omissions in the origination process that can cause compliance issues and delay processing later. As a result, all employees – from the team member who first submitted the loan request, to the credit underwriters and compliance team members – are empowered to process the loan application without any unnecessary hurdles.

For lean teams, modern statement spreading tools, such as Baker Hill’s Statement Spreading solution, can also dramatically improve the quality, consistency, and efficiency of financial analysis. Your institution should look for a solution that will give your underwriters or credit analysts the reporting options they need to assess risk and make accurate underwriting decisions. To do this efficiently, you want lending software with a scoring model that provides recommendations based on the credit file of the borrower and your institution’s credit policies. Ideally, the software will also eliminate the need to manually rekey tax and financial statement data, which is time-consuming and requires pulling information from multiple systems and documents.

With advanced statement spreading tools, credit analysts can more easily conduct complex ratio analysis, projections, peer comparisons, sensitivity analysis, and more. As a credit request progresses, team members can generate a more robust credit memo to support decision making.

In addition to streamlining commercial loan requests and the underwriting process, better statement spreading capabilities can improve portfolio management in the long run. For instance, portfolio managers can group commercial deals based on specific underwriting criteria, such as property ownership, and proactively manage risk throughout the life of the loan.

Profitable Portfolio Growth Takes a Team

Deposits fell by more than 2% at the end of 2022 and interest margins are getting squeezed. Meanwhile, commercial loan delinquencies increased in the first quarter of 2023.

To outmaneuver these headwinds, financial institutions need the right tools and processes in place that keep all team members closely aligned – from your relationship lenders to your credit analysts and underwriters.

With the right technology, credit and lending teams can work together to streamline the loan origination process. A more efficient commercial loan origination process not only ensures a better borrower experience, it fuels more profitable portfolio growth for financial institutions, regardless of their team’s size or experience level.

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