Do Your Loan Approval Formats Lack Consistency and Flexibility?

Do Your Loan Approval Formats Lack Consistency and Flexibility?

The fact of the matter is that large financial institutions court high-value commercial loans. The average dollar amount of a small business loan from a big national bank varies depending on the source, but it’s well over half a million dollars. This number is more than what many small businesses would apply for or need. 

Small business owners often have difficulty meeting large banks’ stringent loan qualifications (strong credit scores, established businesses, and strong financials) anyway. This opens opportunities for community banks and credit unions to meet the loan needs of these businesses. 


Approving Loans for Small Businesses

As loan officers and potential borrowers connect and move forward with an application, the loan will eventually reach a point where it needs to be approved. However, the approval process can be hindered by a lack of standardization. Whether the approvals are prepared in Word/Excel or a commercial lending solution that lacks customization, the approval process can be frustrating for a loan committee.

While every small business is different, the loan committee needs to absorb the information presented. Officers may try to be “creative” in their Word approval formats, or standard formats do not meet the needs of different types of loans. 

If a commercial lending software lacks flexibility or when an in-house created document allows too much flexibility, decision-makers spend too much on the format instead of focusing on the loan request.


Loan Approval Formats: Standard, Yet Customized 

The solution is commercial lending software that is customizable to your officers, decision-makers, and types of commercial loans. For example, templates customized to your bank should:

  • Give officers a framework to input required information
  • Give decision-makers a consistent process for review
  • Accommodate different commercial loan types so that it is not a “one size fits all” approach

Your borrowers will be better served by being able to move loans through the approval process more quickly.


Learn More:

The Square 1 Credit Suite allows you to create a comprehensive package for your loan committee using templates that you define. A demo can show you how to create the formats to meet your needs and incorporate spread data, total obligations of the borrower, and subjective analysis by the officers and underwriters. 

Contact us or schedule a demo today.

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How does a loan origination system work?

An LOS is defined as a system that automates and manages the end-to-end steps in the loan process – from the application, through underwriting, approval, documentation, pricing, funding, and administration.

What is the difference between loan origination and underwriting?

A loan officer is someone who works for a bank or credit union or other financial institution and offers loans to borrowers, while an underwriter is someone who analyzes documents from potential borrowers to determine if they are eligible for a loan.

What are the benefits of loan origination software?

By now, lenders are well versed in the benefits of a digital loan origination system, such as: Providing borrowers with easy, streamlined, and digital applications. Providing bankers with automating spreading and financial analysis tools.