Automated Business Loan Origination
System to Drive Efficiency
About the Client
The client provides low-cost financing solutions to small businesses in the US. They provide term loans and a Line of Credit to thousands of small businesses and stand out in the market because of their quick turnaround time, hassle-free, fully digital experience, and reduced paperwork. Our client has an A+ rating from BBB and a Trustpilot rating of 4.90 on a 5.0 scale.
Background
The ticket size of the loans for this client is between $250,000 and $500,000. These are unsecured loans for a term of 3-5 years with an APR starting at 9.49%. They process a few thousand loan applications on a monthly basis.
At present, their entire underwriting process is largely manually driven across spreadsheets and Google Drive, which significantly increases the turnaround time and effort to process an application and also leads to lower satisfaction amongst customers and partners.
Key Requirements
The client wanted to increase the number of loans they fund each month by improving the TAT. To achieve this, they had to make the entire underwriting process more efficient and software-driven. Also, to improve the quality of underwriting and without asking for too much information from the customers, the client had a choice to use various Third-party data sources in their approval waterfall.
Proposed Solution
LendFoundry proposed its Loan Origination System, which will enable the client to process an increased number of loans more efficiently and in a more automated way. The applications are initiated, and the minimal data required to process an application is collected from the borrower. As soon as these details are received and the application passes initial pre-eligibility checks, the application is submitted to Lendfoundry’s LOS through an API. LF LOS then manages the entire process of the loan origination cycle, i.e., the verifications (where most of the third parties are integrated), collecting and storing of the required documents, the underwriting process (where the custom screens are provided), and offer generation to funding.
Integrations Used
Features Used in the Solution
LendFoundry offered an API-based LOS, a back-office portal (for our client’s team), and a Broker portal(for their partners to submit and track applications) to fulfill the client’s expectations. The client is using their own online application submission form, which is hosted on their website.
Key Features:
Key Challenges
To accommodate the custom workflows of the client, a lot of new features were designed and implemented in LendFoundry.
They are –
Overall Impact
The automation achieved through the implementation of LendFoundry helped the client optimize their underwriting process by enhancing throughput and accuracy. The modular architecture of the implementation also enabled the client to integrate with a large number of third parties.
The flexibility implemented in the system enabled the client to cover a larger number of scenarios for underwriting.
About LendFoundry
LendFoundry is the next-generation, cloud-based, SOC1 and SOC2 Type 2 compliant, full-stack technology platform to enable digital lending.
Available as a SaaS offering on AWS, LendFoundry is built using a microservices architecture and is highly customizable and scalable. Powered by API integration with 80+ traditional and alternative data providers and platforms, it can help digitize a lender’s entire loan lifecycle to deliver faster loans and also add new customer segments.
Key Modules: Borrower Portal, Broker Portal, Dealer Portal, Merchant Portal, Lender Portals, Loan Origination System, Loan Servicing System, Loan Management System, Business Analytics.
