Armed with automation, APIs and experience, lenders across the country are making preparations to process the torrent of Paycheck Protection Program loans expected when the Small Business Administration re-opens the E-Tran system on Monday at 10:30 a.m. EDT.
“Speed is the name of the game. We know there will be a mad dash to the SBA E-Tran portal and being first in line will increase the chances a loan will be funded,” said John Cole, chief information officer at Walton, W.V.-based Poca Valley Bank. “Everything is electronic now.”
Last week’s first round of PPP loans saw many banks and credit unions relying on manual processes to administer the loans. This time around, lenders have had the firsthand experience and time to implement tools and automation to speed up the process.
Poca Valley Bank, while an SBA Express lender, did not typically process SBA loans, Cole said. After organizing an PPP team in the commercial lending group, the bank implemented Fiserv’s API solution, which is directly integrated with the E-Tran system, that helped the bank take in more than 100 applications during the first PPP round. About 25% of those applications were processed and funded, he said.
Prior to integrating with Fiserv, Poca Valley, which has $375 million in assets, was exporting the online loan application data to a spreadsheet to be approved, then submitting loans one by one to the SBA. “With the API, we now have pending loans queued and ready to go, and we will send all the applications at once via the API,” Cole said.
IBERIABANK, which is based in Lafayette, La., and has $31 billion in assets, did not have a single integrated process to process PPP loans and was using email, Microsoft Word documents and PDFs prior to installing nCino in 2017, according to Randy Bryan, executive vice president and director of business transformation. Since then, the company integrated with cloud banking provider nCino to streamline and standardize the process, affording the bank increased visibility from the qualification stage to the closing process.
Also read: Weekly Wrap: PPP’s round 2, Oracle-Boss Insights deal, lessons from Greenhouse
“It’s a numbers game for us, as it is for everybody else, and to move some of that verification process downstream and divide up the work is a more efficient way than with a more traditional process,” Bryan said. “[The PPP loan] is a product that didn’t exist three weeks ago. It’s a totally different loan, it’s a different animal, where you’re working through a different process.”
In addition to bringing in employees from other departments to process the loans, IBERIABANK built “smart checklists” into the system to ensure the application is correct before being sent to the underwriters, Bryan said. The bank also automated the E-Tran and loan-booking processes, he said.
IBERIABANK took in 9,500 applications totaling $1.9 billion during the first wave of PPP, and funded more than $640 million in approved small business loans.
CU NextGen, which builds technology for nearly 70 credit unions, built a bot that automates the E-Tran submission process, said Kent Zimmer, CEO of CU NextGen. The R&D tech firm provides its consortium of credit unions a white-label online application that’s available through a link; once an application is submitted, the bot intakes the information in a database format and uploads it to CU NextGen’s back-end system, where the lender can view the documents and application. Once the lender approves the app, the bot sends the package to the SBA. Tech integration with the credit union’s system doesn’t occur until onboarding and funding since the lenders use a link that directs straight into CU NextGen’s system.
“To be honest we haven’t fully completed [the integration process] because you have 10 days to fund the loan once we get an SBA approval so our entire focus has been on making sure we’re completely ready to get that SBA approval,” Zimmer said. Currently nine credit unions have integrated the solution and it has processed “hundreds” of applications, Zimmer said. Alaska USA FCU, Coastal Credit Union and Corporate One FCU are among the credit unions in the consortium.
According to a statement provided by the SBA and U.S. Treasury to Bank Innovation, the SBA will resume accepting PPP loan applications Monday “from approved lenders on behalf of any eligible borrower.”