Construction loans are a major source of income for many financial institutions, but the complexity of these long-term projects requires many stakeholders, documents, signatures, and approvals. Construction loans have always been considered risky for banks because they involve long-term exposure to collateral and there are often no other tangible assets. To stay on top of their portfolios, many banks are turning to fintech for help. The process of getting a construction loan is not as tedious and time-consuming as it used to be. It has become so much simpler that some people are even able to get a construction loan within just a day or two.
Ease of documentation
Well-organized financial documentation is a critical component of a successful construction loan process, and construction loan software provides a more efficient way of lending money to construction projects while reducing risk. Rather than utilizing multiple lines of communication or a spreadsheet system for keeping track of updates, construction loan software creates one hub for storing documents, photos, signatures, and approvals. With better storage and a progress-monitoring system in place, banks can avoid delays and prevent lenders from losing valuable interest income while keeping records organized and easy to audit.
Customer benefit
Construction loan software helps developers and contractors by simplifying the communication process from pre-construction to post-construction. The software allows builders to upload documents and photos from the field, manage their finances, and track project progress all in one place. Automatic notifications alert stakeholders when inspections are uploaded or when the next step of the loan process is ready. Having all documents at their fingertips can help contractors stay on top of projects and speed up funding cycle times.
Time-saving automation
Rather than waiting for a phone call or trading emails back and forth, users of commercial loan software get an alert immediately when an action is taken or when an approval is waiting for them. This cuts down on the back-and-forth emails, double-checking spreadsheets, and games of phone tag. Plus, every step has been documented along the way. No more pulling up that last email to see what has previously been discussed or searching inboxes for documents. Softwares use digital workflow to accelerate draw cycle times, providing approvals days faster than the manual process and increasing draw interest.
Reporting functionality
Financial institutions are constantly evaluating loan profitability and progress. Rather than manually compiling spreadsheet information, commercial construction loan software like Construct can pull any report needed, whether it’s for one specific project or an entire portfolio. Financial institutions can customize reports to fit the needs of any internal assessment or answer any question that auditors may pose.
Cooperative software
Choosing a construction loan software can be tricky depending on the other systems already in place at a financial institution. Construct’s export system means that lenders do not have to re-enter loan information that they use in Construct into their core system. Data can be exported as a file and uploaded to the institution’s core, saving time and reducing the risk of keying errors. A good construction lending software should be able to work alongside multiple LOS systems and core systems, making integration simple.
