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Financial Services

How Small Business Lenders are Speeding Up Loan Processing

By June 8, 2022March 14th, 2024No Comments
loan processing small lenders outsourcing blog

Financial institutions support businesses in fulfilling their financial needs promptly and efficiently. In the US, only 48% of small businesses have financing needs met, and a considerably high percentage of 52% of small businesses receive no financing or only receive a part of the credit they need.

Lending institutions are more prudent in improving their practices to increase efficiency and decision speed to enhance their customer experience. Although they are already making every step to favor businesses, paper-intensive processes may become an obstacle to addressing the evolving needs of small businesses. Therefore, they are embracing a digital approach and adopting technology to automate the end-to-end lending process in their existing systems.

Let us look at the challenges lending institutions face and how digitization can help them to speed up loan processing.

Why are Small Business Lenders struggling in Loan Processing?

Lending institutions need solutions to overcome the following challenges in small loan application processing:

  • Prolonged onboarding period due to paper-intensive processes 
  • The unstructured risk assessment process, credit approvals, and loan renewals 
  • Counterproductive data monitoring 
  • Incapacity to cater to all businesses due to lack of customized financial products 
  • Difficulty in managing regulatory policies manually 
  • Ineffective processes for loan origination 
  • Unmanaged data issues  
  • Unstructured process requests delays

How Digitization Helps to Speed Up Small Business Loan Processing

Digitization helps lenders improve the borrower’s experience and increase top-line revenue at a reduced cost. Here is how digitization transforms and simplifies the arduous lending process into a wow encounter.  

  • Digitizing the onboarding process: Borrowers can experience a fully touchless experience. They can upload the required documents to send the data online. 
  • Digitization can simplify the underwriting process:  Using data sources for underwriting – credit bureau and alternatives and data analytics, they can simplify the back-end processes. 
  • Bridging data: Digitization can bridge data effectively, which helps to boost the flow of information through a digital automation platform. It results in more collaborative tasks.
  • Data Capture Service: Data capturing from multiple sources becomes fast by automating the workflow in the lending systems.  
  • Decision-making based on predefined algorithms: Lenders can optimize the loan approval process based on predefined algorithms for decision-making. It results in reduced disbursement time with a quick document processing service
  • Credit risk evaluation: Lenders can employ a rule-based mechanism to minimize the turnaround time in credit risk assessment. Also, it reduces operational costs. They can deploy machine learning credit score evaluation in real-time. It will reduce the discrepancies and complete the process without any delay.  

Overall new-age technologies can minimize overheads and speed up the lending processes by managing the loan cycle online.  

Thus, small business lenders can streamline, speed up and transform lending processes from prospecting and origination to underwriting, disbursement, and servicing through the latest technologies, like automation. Instead of taking the burden of investments in technologies, most large national banks, small regional banks, and alternative lenders prefer outsourcing to leading business process outsourcing companies.

Leading BPO companies like ARDEM can help lenders to bring value to their customers. ARDEM offers automation technology for your loan application processes with Data Capture & Extraction solutions. They ensure 99.7% Accurate Data Extraction & Data Entry. Their teams can work on our Cloud Platforms

ARDEM provides Business Process Outsourcing and Business Process Automation Services to established companies to help them improve operational Efficiency and Reduce Costs. For more information, please reach out to us at or call us at 908-359-2600.