Independent Banker - February 2022 - 29

EXPERTS
Game-changing industry insights
for community bankers
Defining What Smart Business
Lending Means In 2022
What does " frictionless lending'' mean to you?
You may have heard the term frictionless business lending, and you may have explored solutions to
create that experience for your customers and community bank. Many solution providers say they offer a
frictionless business lending experience, so how do you select the best one for your bank?
There are 4 key points to consider when evaluating a frictionless small business lending experience.
1. Ease of application for your small business borrower.
2. Intuitive workflow for your bank to manage loan applications and processes.
3. Smart decisioning and underwriting for fast approval and risk management.
4. Loan documentation process.
Sanjay Bhaskar
VP, Business Development
& Partnerships
StreetShares
sbhaskar@streetshares.com
Let's take a deeper look at these key points so your community bank can make a thoughtful decision when it
comes to your frictionless business lending experience.
1. Application - Is the borrower application fully mobile enabled? Can it be completed from any device
leading to more convenience for your business borrower? What is the typical time to complete the business
loan application? Ten minutes or less is typically a good target to keep in mind. Today, customers expect
a digital application to open a new account, apply for a new loan, etc. Therefore, it has never been more
important to provide them with a seamless, digital customer onboarding experience.
2. Workflow - Is there excess back-and-forth either internally or externally, between loan officers and
customers? Underwriting, regardless of loan size, can be time consuming. In fact, underwriting smaller
loans takes as much, if not more time, than larger loans, so which solution enables loan officers to spend
more time on larger loans without having to ignore the smaller ones? A lot of time is spent in the workflow
phase, but it doesn't have to be this way. A solution that enables communication between both customers
and loan officers and loan officers and other bank personnel is an invaluable tool to establish steady,
consistent workflow practices.
3. Decisioning - What do we currently require to underwrite a loan? I'm guessing tax returns and financial
statements. But what about bank statements? Can the system take into account traditional underwriting
methods like debt to income and debt service coverage ratios while layering in new tools like cash flow
analysis? Cash flow analysis can be a critical risk management tool oftentimes underutilized in today's
lending department because it is very time consuming. Does the lending solution provide additional
risk management data points, such as cash flow analysis, in a timely manner? Does the solution have a
spreading tool? A solution that factors in a cash flow analysis tools can provide not only new data points,
such as cash inflow/outflow and burn rates, but also a faster, more reliable decisioning process. Do you
have the ability to edit or modify decisions quickly and efficiently?
4. Documentation - the documentation process can be a cumbersome one because it spans the entire
underwriting experience, from gathering initial underwriting documentation, such as financials, to offers
and adverse letters, and to closing and boarding. Does the lending solution generate loan documents for
the bank, or does it have API integrations with key documentation providers, or can it quickly export the
loan information to your system so you do not have to manually create loan documents? Can adverse
actions be delivered efficiently if a borrower is not eligible for a loan?
There is a lot to consider when trying to create a frictionless business lending experience for your valued
customers. Having the right tools in place and asking the right questions can be critical to your success!
Visit Streetshares.com or email atlas@streetshares.com to learn how you can radically transform your
business lending with ICBA's Preferred Service Provider (PSP) for business lending.

http://www.Streetshares.com

Independent Banker - February 2022

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