The commercial lending process has been in desperate need of reform for a considerable amount of time. Anyone involved in the process knows this. In today’s environment, time is money, and what can easily be finalized in as little as five days can sometimes take several months, which is critical time that borrowers can be spending prioritizing other projects or implementing their business plan.
Below we discuss how technology can enhance the commercial lending process and create the following opportunities for borrowers:
The quote submission process for commercial mortgages forces borrowers to put their trust in the hands of a broker, whose job is to shop a deal around for the best terms. This is a time-consuming process and the borrower doesn’t know if the deal they’re getting is truly the best offer or is simply a result of backdoor arrangements and personal connections.
A broker will typically prioritize their lender relationships first before going wide to other contacts. The problem that often arises here is that if the initial lenders pass, the information is stale by the time it’s presented to other lenders. At this point a borrower has already spent a considerable amount of time waiting for an acceptable quote, sometimes even several months, and the terms they’re receiving are suboptimal leading to increased feedback loops. When a borrower can present their deal information to the top lenders all at the same time through a digital marketplace driven by automation and innovative technology, they are able to speed up their timelines substantially and avoid all unnecessary feedback loops. Borrowers have peace of mind knowing they are going through a competitive process as all lenders are quoting their deal to the best of their ability day one.
Faster timelines also enable borrowers to act quickly in the marketplace and capitalize on more opportunities such as strategizing further on the vision and branding for their projects. With automation, feedback loops and side conversations that can delay decision making and closing timelines are minimized, allowing borrowers to participate in a much more efficient bidding process that results in optimal terms. Once a quote is received, a borrower can begin to act on next steps and make immediate progress on their project.
The nature of broker and lender relationships makes commercial mortgages an opaque process. By using technology to create a digital marketplace for easy transactions, borrowers are armed with a transparent dashboard where lenders can react and provide deal quotes in real-time based on current and up-to-date information. As previously mentioned, they no longer have to wonder about whether their broker is only relying on current relationships or conducting widespread outreach to obtain the best outcomes on their behalf. The power is put directly in the hands of the borrower to assess various deal terms and determine which is best suited for their project. What’s best is that all parties can still play to their strengths, ensuring fair quotes and allowing for the best possible outcomes.
A centralized platform equipped with automated processes that streamline inefficiencies in commercial lending creates a more pleasant and stress free experience for borrowers. Instead of guessing what the status is on a quote, borrowers are kept in the loop with real-time alerts as soon as an update is available and a single, easy to read interface allows them to clearly review and make a decision quickly.
It also decreases the likelihood of miscommunications and errors taking place, which are common barriers that can lead to delays in receiving a loan. A digital platform that can store important documents and financial information in one place removes the need for borrowers to share documents more than once, creating a more efficient and smooth process.
When borrowers leverage technology for commercial lending, they open up a world of opportunity. By streamlining this process, borrowers can spend less time on unproductive tasks and more time putting projects into motion. Automation removes the friction from the tedious aspects of commercial lending such as back and forth communication, disorganization, and misalignment, and puts borrowers in the best place to obtain optimal terms.
With a digital marketplace like TrueRate, borrowers can easily submit key information and property financials through a secure and intuitive platform, utilize a real-time automated sizer, and receive updates within one, user-friendly interface, eliminating unnecessary back and forth and frustrations. They can also free up a large percentage of their work day to obtain a competitive edge by receiving a quicker turnaround time on their loans and making progress to strengthen their portfolios.
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