Working with as many community banks and credit unions as we do, we have found that each follows unique loan origination processes and uses certain definitions (or even terms) for each stage of the process. Despite the differences between financial institutions, one thing remains clear: your loan origination system (LOS) should integrate smoothly with your unique processes to help you manage risk and take advantage of efficiencies.

Community banks and credit unions make various types of loans, and some of the stages of the approval process are automated and some are manual. Choosing the perfect community bank or credit union loan origination system can benefit your institution in several areas to increase your overall growth and profit objectives for your commercial loan portfolio:

  • Improved credit underwriting efficiency and accuracy
  • Cut down on redundant tasks and data entry
  • Decrease time from application to credit decision
  • Effectively identify and manage loan portfolio risk
  • Give executives concrete data on loans across the board
  • Streamlines the lending operation back office

Loan software for lenders, like Square 1 Credit Suite, fits in to the commercial, commercial real estate and agriculture loan origination process at several stages in your specific workflow to increase ROI that occur from the benefits of both improved efficiency and reduced loan losses.

Commercial Loan Application.  Your team collects and reviews the prospect borrower’s information, such as:

  • A credit or loan application
  • Personal and business financial statements
  • Personal and business tax returns
  • Business Plan with financial projections and cash flows
  • Credit score
  • More as your credit union or community bank requires

Underwriting. The financial information is entered into the Square 1 Credit Suite and analyzed. Based on the initial analysis, your team determines whether to move to the next stage in the process with the borrower.

For lenders using loan origination software the technology is able to seamlessly take the analysis and data collected to build a credit or loan approval memorandum for the appropriate internal loan authority for approval or denial. The more integrated the data and process, the better you can identify and underwrite the credit risk.

Credit Decision. Based on the underwriting results, the loan can be approved, rejected or sent back to the borrower with a request for more information. Using loan origination software, parameters can be tweaked easily to see how the loan might fit in your portfolio.

Loan Closing. Upon approval, the documentation requirements are automatically generated for each specific loan funding transaction. The documents required can be customize to each users’ requirements and will provide a guide to both loan closing and back office loan operations until all documents are in hand on a pre-closing or post-closing review basis.

Loan Funding. After loan closing, Square 1 Credit Suite is able to transmit electronically key customer and loan data to the appropriate loan document software in order to eliminate redundant manual data entry in the production of closing loan documents. Once the loan is funded, the loan will be uploaded or booked to a core accounting software system.

Loan Servicing. Square 1 integrates with a multitude of host core accounting software systems in which the customer and loan data is able to mirror the core system data on a daily basis. This daily update and electronic interface is important to the ongoing loan and portfolio servicing and reporting of commercial customer existing and future new loan requests and overall loan officer loan management of a commercial loan portfolio.

Learn more about our loan origination software, Square 1 Credit Suite. A demo can show you quickly how it could fit within your lending processes to save time, reduce risk and increase efficiency.

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