Coronavirus equals capacity crisis. It’s not just healthcare systems that are trying to adjust to the huge spike in demand, COVID-19 is taking its financial toll, and small businesses are facing uncertain circumstances. With the passage of the Economic Injury Disaster Loan Program, which allows small business owners in any U.S. state or territory to apply for low-interest loans, and the $2 trillion coronavirus stimulus package that allocates $350 billion solely to small businesses, small business loan applications will surge—and banks and digital lenders can soon expect an avalanche of small business loan applications.
How can lenders prepare to process an unprecedented volume of applications? Here are a few steps to manage the massive influx.
Turn to a single system—and streamline your lending workflows
As small businesses scramble to secure capital in the coming months, working through closures to avoid layoffs and continue paying their workers, loan applications will flood through your door—and they won’t stop once we are on the tail end of the virus curve. Small businesses will need funds to get operations, inventory, and staff back up and running. Brick and mortar shops will owe back payments on rent; retail stores will need professional cleaning and trash collection—and many businesses will incur recruiting costs in efforts to hire (or rehire) employees. Of course, not all of these businesses will be credit-worthy, but to weigh which ones are fundable, you first need to answer the question: how are you going to process the unprecedented number of small business loan applications?
If you’re a bank, you may rely heavily on paper-based processes for your lending. If you’re a digital lender, you’re already steps ahead. Yet, while many of us equate technology with efficiency, not all digital solutions are created equal. Processing these applications is easier with an end-to-end digital solution, one that saves loan officers from needing to jump between disparate point solutions and in and out of error-prone, time-consuming steps. A single, streamlined, end-to-end solution supports loan departments in receiving, processing, underwriting, funding (and even facilitating the repayment of) more credit-worthy loans in a fraction of the time, and at a fraction of the cost.
Automate steps that drain the most time—and multiply your output
You may find your loan officers struggling to meet applicant demand—even if you’ve retained your full team. Automating the entire lending workflow saves time and money when it matters most—and gets liquidity into the hands of business owners.
An end-to-end lending solution can help you automate more steps of the loan process:
- Digital loan origination software allows small business applicants to apply online, digitally upload all required documentation, and submit their application forms through the platform portal.
- Pre-set auto-approvals deliver a quick “yes” to applicants that clearly meet your requirements—accepting, processing, and fully-funding the loan in an efficient manner.
- Other rules-based automation enables you to provide a faster “no” to the businesses that don’t meet your basic lending requirements—reducing application build-up without ever manually reviewing a document or having to meet or call an applicant.
Implement a better solution—and aid small businesses through recovery
As reported in SmallBizTrends, 27% of businesses expect the coronavirus to have a moderate to high impact on their revenue, and another 30% expect the virus to have a moderate to high impact on their supply chain. With recovery in sight, failing to deliver funds that can get small businesses over the hurdle could mean permanent closure—at a time of particularly high stakes.
Your ability to meet the impending small business loan demand means more than capitalizing on the profitability it holds for you. A better solution empowers you to meet local small business capital needs—even at volumes way beyond your normal levels—and help get the economy and local businesses moving again.