LoanLosses

Take Steps to Protect Your 2021 Profits

With PPP business stimulus ending, commercial loan and commercial real estate default rates are starting to increase and could dramatically impact your 2021 profitability.

The largest potential impact to a bank or credit union profitability occurs when there is a larger than normal charged expense to the Allowance for Loan and Lease Losses (ALLL) resulting from rising problem loans.

With PPP business stimulus ending, commercial loan and commercial real estate default rates are starting to increase and could dramatically impact your 2021 profitability unless you take steps now to implement the following:

  • Transaction and Portfolio Stress Testing for early identification of loan problems and concentrations
  • Centralization of Credit Management Systems for quicker and consolidated portfolio data analysis
  • Implement Effective Collections and Workout System to establish problem loan workout strategies to minimize credit losses.

Sign up for a live demo of the Square 1 Credit Suite, or contact us for more information.  We have a FastTrack program to help you focus on the key areas of collections and work-out management.

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FAQs

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.