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According to the Federal Reserve, approximately 14% of banking institutions have eased restrictions on lending to large companies, with a slightly smaller percentage freeing up money intended for smaller businesses. As a result, many lending institutions are working overtime to ensure that their loan origination software can meet the needs of this influx of business.
The right lending software can greatly expedite the loan process for all businesses, no matter the size. This is crucial to ably meet the needs of all clients, many of whom must contend with increasingly busy lifestyles that leave time for little else. The following are a few key points one should keep in mind when reviewing an institution’s current loan software.
Business loan applications may include more than one company and/or individual. This is especially true when dealing with companies that have numerous subsidiaries. In order to make an informed decision, lenders must be aware of the credit histories of all entities involved in the business.
For this reason, lending software must include the capability to process multiple parties at once. This important feature can reduce the time associated with vetting an organization, while also ensuring that lenders have a complete financial picture of those requesting a loan.
Knowledge of one’s collateral can be extremely important to the overall loan process. Collateral can factor into the decision greatly, including things like real estate, stocks, and any other assets that may be available for review.
The right software should be able to easily extract pertinent information relating to available collateral. This info can then be used in final calculations, which may be the deciding factor whether to issue the loan. This is especially important when dealing with multiple sources of collateral.
Loan processing can be a tedious procedure, especially for larger companies with more financial data to work with. Parsing through this data can be extremely laborious, which is yet another reason why implementing the right lending program is so important.
In order to protect the financial institution issuing the loan, all aspects of a company’s financial history must be taken into account. This includes a detailed comparison of past financial statements, as well as any other info that can factor into the final decision. Without the appropriate software, these tasks could prove far more challenging than necessary.
Of course, there are many other considerations one should make when choosing loan software. Consumer privacy is a huge issue, especially when considering recent breaches of financial information. Such a breach could be devastating to an institution. The ability to quickly modify financial info is also important, as situations can change rapidly.
Financial institutions must be privy to the big picture when issuing loans. Loan software can be extremely useful in this capacity, because it allows loan officers to investigate all facets of one’s financial history. Such a thorough review is crucial to ensure that a financial institution remains protected when handing out loans.