Leveraging Built for Enhanced Controls, Risk Monitoring, and Portfolio Insights

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Built Team
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Reviewed By
Katie Wilson
8 min
PUBLISHED: 12/7/2023

In the dynamic and ever-evolving world of construction lending, lenders face a constant challenge: Striking a balance between risk management and operational efficiency while maintaining compliance with regulatory requirements. Built, a leading provider of construction lending software, empowers lenders to navigate this complex landscape by providing a comprehensive platform for enhanced controls, risk monitoring, and actionable portfolio insights.

Prioritizing Controls and Compliance: Ensuring Standardization and Process Adherence

Effective controls and compliance are cornerstones of successful construction lending operations. Built’s platform streamlines these processes by providing out-of-the-box compliance reports that simplify audit preparation and reduce the burden of exams. Draw checklists, a crucial tool for documenting and standardizing draw processes, are readily available and can be configured to align with specific lender requirements.

However, simply having controls in place is not enough. Lenders must ensure that procedures are consistently followed in practice. Built’s platform provides valuable insights into process adherence, enabling lenders to identify areas for improvement and ensure that controls are functioning effectively.

Liquidity Forecasting Methodology: Predicting Cash Flows with Historical Data

Accurate liquidity forecasting is essential for construction lenders to manage their capital efficiently and meet upcoming cash flow obligations. Built’s platform leverages historical draw data to predict future cash flows with greater precision. By grouping loans into cohorts based on attributes like loan size and origination period, Built’s analytics can generate customized forecasting curves for each cohort.

These curves provide lenders with a clear picture of upcoming draw schedules, enabling them to plan effectively for capital requirements, budgeting, and funding disbursements. This data-driven approach helps lenders avoid liquidity shortfalls and maintain optimal cash flow throughout the loan lifecycle.

Risk Monitoring Insights: Identifying Emerging Risks and Market Trends

Proactive risk monitoring is critical for mitigating potential losses and protecting lender portfolios. Built’s platform provides comprehensive risk monitoring capabilities, enabling lenders to identify and address potential risks early on. By tracking trends in builder stability, involuntary lien discoveries, and other key risk indicators, lenders can gain a holistic understanding of risk across their portfolios.

Built’s heat map view provides a visual representation of risk concentrations across geographic regions, allowing lenders to focus their attention on areas with higher risk profiles. This data-driven approach to risk monitoring empowers lenders to make informed decisions that safeguard their portfolios.

Positive Trends in Project Onboarding: Streamlining Loan Origination

Reducing the time between loan close and the first draw request is a positive indicator of improved efficiency in project onboarding. Built’s data shows that this timeframe has been steadily decreasing since mid-2022, suggesting that supply chain disruptions are easing and leading to increased predictability upfront.

Lenders can further improve project onboarding efficiency by focusing on factors within their control, such as streamlining closing processes and ensuring that project resources are lined up at loan origination. By taking these proactive steps, lenders can minimize delays and ensure a smoother transition into project execution.

Portfolio Insights on Project Pacing: Unveiling Drivers of Project Delays

Project delays are a significant concern for construction lenders, as they can lead to cost overruns, reduced returns, and reputational damage. Built’s platform provides valuable insights into project pacing, enabling lenders to identify factors that contribute to delays and take proactive measures to accelerate project completion.

Analysis of historical data reveals a clear trend: projects with more frequent disbursement of funds tend to finish construction faster across all loan sizes. This suggests that optimizing builder cash flow through high-velocity disbursements can play a significant role in accelerating project timelines.

Built’s platform also provides insights into other factors influencing project pacing, such as inspection frequency and resource availability. By understanding these factors, lenders can develop strategies to streamline processes and minimize delays.

Leveraging Built’s Platform for Comprehensive Portfolio Insights

Beyond the key topics discussed, Built’s platform provides a wealth of additional insights and analytics that empower lenders to make informed decisions and optimize their portfolios. Concentration analyses allow lenders to monitor total exposure and performance across attributes like asset class, builder, or market.

Details on specific lien types, credit/stability score changes, and other risk alerts are readily available at both the loan and portfolio levels. Customized reports and automated dashboards provide lenders with a centralized view of key performance indicators, enabling them to identify potential issues and take corrective actions promptly.

Built’s proactive monitoring services provide lenders with an extra layer of protection by identifying involuntary liens or other issues before funding events, allowing for timely intervention and risk mitigation.

Conclusion: Empowering Lenders with Data-Driven Insights

Built’s comprehensive platform empowers construction lenders to navigate the complexities of their industry with greater confidence and efficiency. By providing actionable insights into controls, risk monitoring, and portfolio performance, Built helps lenders make informed decisions