Founder @ NowSourcing. Contributor @ Hackernoon, Advisor @GoogleSmallBiz, Podcaster, infographics
Modern tech has built agility into numerous markets. At this time, commercial real estate lending is not one of those markets. Commercial lending hasn’t changed in decades; it still takes 3 months on average to close a commercial real estate loan deal. Brokers are expected to call individual banks in search of deals. In 2019, 43% of US banks still used COBOL, a program language that predates the internet. As a result of these outdated processes, lenders are slow to react to changes in market demand and risk. Negotiation takes a lot of time, and lenders rarely get all the information they need up front.
The 2021 lending landscape can’t afford to be held back in this manner. Not when the pandemic’s aftermath is encouraging a revolution in commercial real estate’s usage. Companies everywhere are rethinking how their office spaces are used now that employees work remotely at least part of the time. The shift to e-commerce impacts retail and industrial real estate both, with stores transforming into mini-warehouses for curbside and delivery services while distribution sites, logistics warehouses, and storage spaces grow in demand. Data centers are popping up in greater numbers as the need for cloud and networking services rises.
Commercial lenders need digital solutions to their analog problems. Finance Lobby offers an agile advantage for commercial real estate. Fintech lenders process mortgage applications 20% faster without an increase in defaults. Lenders enter their criteria regarding asset types, geographic regions, and dollar amounts. At the same time, brokers enter their loan details and borrower preferences on the same subjects as the lender, plus concerns about occupancy, preferences, and sensitives like closing times, recourses, and rates. With both in the system, advanced algorithms match brokers and lenders to their deals of best fit.
By putting all the information in one place and giving lenders the ability to instantly update loan criteria as their needs change, both brokers and lenders save time and effort they would have previously spent tracking each other down. Digital negotiation and bidding also reduces the time it takes to reach a deal that everyone can benefit from.
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