Scale for Success: Implement a Digital Solution for Commercial Construction Loans

As lenders digitize their processes, they’re able to transform antiquated workflows into modern efficiencies. Construction lending is one of the last, largest remaining industries to undergo digital transformation. It’s crucial that lending institutions, especially those with commercial real estate construction portfolios, find ways to modernize their processes to stay ahead of the competition and maintain a high level of service. With these complex loans, it’s also necessary to do so while mitigating all risk involved in the process.

At large lending institutions, there are many siloed hubs for information—spreadsheets, shared drives, core accounting systems. Those who work in loan administration can often get stuck retroactively repeating work, focused on unsustainable processes and unreliable data. 

Risk mitigation is made possible with a digital solution. Spreadsheets are prone to manual error—and a small typo can have a massive ripple effect on a bank’s bottom line. Despite the fact that spreadsheets are more reliable than paper, they’re nowhere near as effective as a tool like Built. 

Built enables lenders to put guardrails in place to ensure that everything happens according to plan, while also allowing for the flexibility that large commercial projects require. Before the first draw occurs, everything is set up in the system correctly so that things move in a seamless way from the very beginning of the project. For commercial lenders, Built even has the ability to monitor complex capital sources and set up the eligible uses of those sources as they relate to the budget. Technology providers like Built are equipped with the backend infrastructure necessary to combat risk and keep all data encrypted and safe. A cloud-based system also minimizes the opportunity for things to get lost in communication. The lender and borrower have access to the same information, happening at the same time. Everything from document management to core system integrations helps ensure clear communication and reconciliation. All of these features save your team valuable time that they can then turn around to focus on building relationships with customers. 

When you’re starting to consider scaling your portfolio for this century, consider how these loans are operating today and find a system that improves the way they run. Built connects your processes and workflows to make sure that things run smoothly—without causing a major disruption in your day-to-day. Your team will benefit from streamlining tedious tasks while mitigating project risk. In the case of a commercial project, it’s really important to make sure that your borrower is having the best possible experience so that you can earn their trust and, ultimately, repeat business. A digital platform empowers the borrower with the tools and information they need at all stages of the project. They gain their own access to project data, reporting, budgeting, and more—and they will not have to reach out to your team to see it either. Borrowers have come to expect a digital experience in nearly all facets of their lives, so provide it for construction lending, too. 

Lenders who refuse to go digital for construction lending will face a number of challenges—all of which result in decreased efficiency, which will impact your bottom line. Information silos, created by spreadsheets and disparate systems, make all data more susceptible to risk. Your customers trust you with valuable information, so having safeguards in place to protect from the threat of risk is imperative. There’s always going to be some form of risk involved in construction lending, how are you setting yourself up to handle that? 

Sam Greene is a Solutions Engineer at Built Technologies. Prior to joining the Built team, Sam worked at one of the nation’s largest banks with a focus on managing syndicated and highly complex financial facilities, including large balance commercial construction. Built Technologies is the leading provider of construction finance technology in North America. To learn more about Built’s solution for commercial real estate lenders, visit getbuilt.com/commerical

Topics: Construction Finance | Construction Lending | CRE | Mitigate Risk