Built Answers: Grow Your Portfolio Without Increasing Headcount

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Mike Segreto
PUBLISHED: 01/24/2019

Lenders can often feel the pressure of having to grow their book of business no matter the state of the economic or cultural environment. For this reason, they may look for new opportunities and innovative products to strengthen and expand their customer relationships, ultimately growing their loan portfolio. 

This could mean expanding areas of their lending portfolio they haven’t before, namely construction — a trend we’ve seen growing recently. As you may have heard or read, the nation is currently facing a housing inventory shortage, predominantly in entry-level housing. New homes aren’t being built fast enough to match demand and money has been slow to flow into new construction. There is an opportunity here, and many lenders are looking for effective ways to grow their construction portfolios while demand is high. 

The real opportunity for lenders is to successfully mitigate the risks of construction lending and create a portfolio that drives significant revenue for their institution.

Question: We’ve begun investing more in construction lending and have seen good results. I can see the potential of construction lending as a bigger percentage of our overall portfolio. But adding loan volume also means adding overhead costs — staff, tools, and more — and we can’t seem to make any efficiency gains with our current processes. It seems like substantially growing our construction portfolio will require growing our team as well.

How can we significantly grow our construction loan portfolio without significantly overextending ourselves with additional headcount to make sure we still make money from the loans?

It sounds like you’re in a tough spot. Your portfolio is growing. That’s a good thing. Your team is growing, too, which all around is a good thing. But less than ideal when it has to grow so quickly that the new costs suddenly eat up any revenue increases you’ve created.

We feel your pain. Construction loan management has traditionally been an extremely manual and complex process. We have conversations with lenders large and small, across the country, on a daily basis who tell us that their team is working too hard on tedious tasks that prevent them from doing their best work. But they don’t see another way, so they feel stuck.

Leadership coach Marshall Goldsmith has a great saying: “What got you here won’t get you there.”

It’s time to try something new. In this case, it’s using modern technology to streamline manual processes and improve efficiencies at every level of your loan management process. Your team knows that excess, and sometimes unsecure, communication channels and file sharing systems get in the way of them doing their jobs. They also know that manual data entry on spreadsheets isn’t the best use of their time. It just takes a willingness to make a change.

And it pays off. Pinnacle Financial Partners doubled their loan volume after implementing Built without increasing employee headcount. How? Digitizing their loan process made things more efficient and improved communication across the board. Franklin Synergy Bank reduced their draw processing times from 24 hours to 30 seconds and significantly increased loan profitability by ditching disparate systems in favor of Built’s secure, cloud-based platform.

We might be tempted to add “results not typical,” but they are. When lenders commit to making the transition to a new way of processing their construction loans, they reap the benefits almost immediately. There isn’t anything wrong with the old way, except that it doesn’t scale.

Doubling your loan portfolio no longer means having to increase your headcount. And it no longer means asking your most talented employees to do repetitive tasks instead of finding creative ways to improve your business. With the right technology partner, lenders can provide a best-in-class experience to borrowers while freeing their team to make better decisions and grow their business.