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For too long, this critical sector has operated with outdated tools – PDFs, Excel spreadsheets, and overflowing inboxes.
This trend was unpacked by Citoplus co-founder Graham Strain in a recent episode of Finance Specialist. Here, he delved into how technology is finally transforming the commercial lending landscape.
Strain highlighted the stark contrast between the two lending worlds: “SME lending, business banking, and commercial breaking, it’s still done like it was in the 80s. PDF application forms and Excel spreadsheets. Most brokers run their business out of their inbox.”
In commercial lending, speed isn’t just a convenience – it’s often a necessity. Unlike a home owner refinancing a loan, a business customer might need a quick cash injection to seize an opportunity, purchase essential equipment, or keep their operations afloat.
A natural concern when discussing faster lending is risk assessment. How can lenders approve loans quickly without compromising on due diligence?
Strain clarified that technology primarily supercharges the collation and verification of information, not necessarily the final decision.
“The vast majority of the time inside lenders is still spent collating, assessing, verifying, piecing together the transaction,” he said.
Once the right information is assembled efficiently, lenders can then apply their judgement to the unique complexities of each business.
“Everyone should be spending their time on the things that add value, which is like using the information to make the right decision rather than collating the information,” Strain said.
This approach allows bankers and brokers to focus on structuring the best deal for the client.
This technological shift is coinciding with the trend of more mortgage brokers diversifying into commercial lending. Strain believes technology is a key enabler of this diversification, but it’s part of a larger picture.
He compares it to learning to drive a car: “You need to know where you’re going [education], you need to know how to drive the car [training], and you need the right car [technology].
“The broker of the future is tech-powered.
“A combination of human judgement and technology.”
The push into commercial lending isn’t just driven by broker ambition. Market dynamics are creating a perfect storm of demand. Strain pointed out that after a period of low growth, businesses are now actively seeking finance to invest in expansion, new equipment, and their own digital transformation.
Coupled with more investors looking at commercial property and a surge in new business start-ups, the need for efficient commercial lending solutions has never been greater.
The message is clear: the era of the manual commercial loan is ending. Technology is no longer a nice-to-have, but a critical component for brokers who want to compete, provide exceptional client service, and thrive in the growing SME lending market.
By embracing digital tools that enhance speed and efficiency, brokers can ensure they are the go-to advisers for business clients in need of certainty and fast solutions.
[Related: Finance Specialist: How technology is revolutionising commercial lending]
