Construction Lending 101

The Ultimate Guide to Modern Construction Loan Management

Download the Ultimate Guide to Modern Construction Loan Management
Download the Ultimate Guide to Modern Construction Loan Management

Unlike most real estate-backed loans, construction and renovation loans require constant oversight. The old way of doing things meant a process widely recognized as highly cumbersome, costly, and fraught with risk. But, it doesn’t have to be that way.

The right technology solutions can replace your need for spreadsheets, emails, phone calls, and paper files to manage construction loans. And, by connecting everyone involved in a construction loan and automating manual administration tasks, you can eliminate disorder and prioritize next steps to keep you moving forward with full transparency.

Whether you’re small or a national lender, you want every project completed on time, on budget, and without any misappropriation of funds—which is easier said than done.

In this guide, learn from banking experts with first-hand experience how the right combination of loan management fintech resources can help you simplify collaboration.

State of the Nation’s Housing 2018

Substantial growth within the housing industry coupled with a strong and growing economy led to exponential growth in construction lending last year. Learn what experts predict will happen next.

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Collaboration Modernize Processes

With construction lending software—a single platform connecting lender to borrower to builder to any other individuals involved in the process—you can provide your borrowers a secure alternative to risky communication through other channels.

In an industry that continues to become more complicated, it’s time to explore ways to make things more simple. Technology solutions can help you:

  • Create unique workflows to accommodate all types of construction loan products and multiple lines of business.
  • Keep all of your construction files and documents in one place—organized, shareable, and downloadable.
  • Configure draw workflows to ensure proper approvals and compliance.
  • Direct connectivity to your loan origination software, core, and other trusted systems.
  • Use digital draw schedules and project budgets that are automatically reconciled. No more spreadsheets.
  • Access the information you need quickly and easily. Click a button, gain insights.

construction worker on site

Navigating Software Change

Change management can be a science and an art, especially when it comes to technology. Learn how to get buy-in from your team and maximize ROI.

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Automation Increase Efficiency

At the end of the day, in this highly competitive industry, what differentiates one construction lender from another is ease of access and overall quality of customer service that a lender can offer.

Technology can help you reduce risk while making renovation and construction loans processes easier for you and borrowers.

  • Manage loan budgets and controls with ease
  • One-click draw process
  • Significant reduction in data entry

business team implementing construction loan automation

Franklin Synergy Bank

Find out how Franklin Synergy Bank improved their construction loan administration to manage more than 1000 loans with only two administrators and decrease draw processing times from 24 hours to 30 seconds.

View case study

Reduce Risk Avoid Surprises

Construction loans require more post-closing support and ongoing administrative effort to be properly serviced than any other type of lending.

Loan automation software helps lenders avoid surprises and focus on what they do best—building relationships and growing their business by allocating resources to revenue-producing activities.

Without automation, lenders rely on paper files, spreadsheets, and numerous phone calls, emails, faxes, and meetings with borrowers, builders, and inspectors to manage their construction portfolios. Whereas with loan automation software, lenders can avoid surprise by eliminating manual processes, saving lenders time, and increasing profitability, with:

  • Real-time connectivity between all parties (lenders, borrowers, builders, and inspectors),
  • Administrative efficiency through simplified compliance and automated budget tracking, giving your team the ability to manage more loans in less time and reduce your underwriting risk, and
  • Streamlined processes, resulting in more interest income for you and quicker draw turnaround times for builders.

construction workers examining blueprint

10 Ways to Reduce Risk in Construction Loans

As a lender you want every project completed on time, on budget, and without any misappropriation of funds, which can be easier said than done. Find out the smart ways you can proactively manage risk and avoid surprises.

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Profitability Save Money

In today’s financial market, institutions are competing less on price and more on ease of doing business and the overall experience they provide to borrowers.

Competing for business based on rates is a losing game, but the ability to provide a digital platform that can ensure a faster, more efficient draw process and provides complete transparency for every action is a valuable asset that builds trust with builders, ultimately resulting in increased business through referrals.

Digitization throughout the entire mortgage industry is transforming construction and renovation lending from an antiquated process requiring multiple platforms to a streamlined and singular, user-friendly environment.

With the right software, you can grow profitability and save money by:

  • Easily measuring ROI
  • Reducing draw turnaround time
  • Increasing administrative efficiency
  • Growing your loan portfolio without increasing its administrative headcount
  • Reducing risk
  • Simplifying compliance

Next step Getting Started

Technology solutions are key to attracting and retaining the best builder and borrower relationships. Builders understand that the real work begins after closing, and they are more likely to choose and refer a lender who provides the most efficient way to manage their loans.

Before implementing a new software system, be sure you have an end-user training strategy in place in order to get maximum your return on investment. Remaining vigilant and tuning in to your employees' emotions, struggles, and triumphs during times of change will help your company avoid a great deal of pain.

If you can show your employees the benefits they stand to gain by getting on board and learning a new system, your entire office will commit to making the best of their new software.

Contact us for a demo and consultation.

Navigating Software Change

Change management can be a science and an art, especially when it comes to technology. Learn how to get buy-in from your team and maximize ROI.

Download ebook

Download the Ultimate Guide to Modern Construction Loan Management
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Baker Hill + Built

Baker Hill’s sophisticated technology solutions enable banks and credit unions to compete aggressively in today’s complex lending environment.

We formed a strategic alliance with Built Technologies to make it easier for financial institutions to drive productivity and profitability in all areas of construction lending.

This alliance expands access to Built’s secure, cloud-based construction lending software and Baker Hill’s latest lending and risk management solution, Baker Hill NextGen®, to bring the draw management process online, connecting each person involved with the loan and automating manual administration tasks.

“Baker Hill and Built make it easier than ever for financial institutions to drive productivity and profitability in all areas of construction lending, including consumer, home builder finance, and commercial. Baker Hill NextGen® ensures lenders have access to the right information in real-time to streamline lending processes and increase profitability while reducing risk.”

—Chase Gilbert
CEO and cofounder, Built Technologies

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