Commercial lenders face mounting pressure to make faster, more accurate decisions while maintaining competitive edges in increasingly crowded markets. Two technological innovations stand at the forefront of this evolution: automated spreading tools and business intelligence platforms. When these technologies converge, they create powerful opportunities for lenders to transform their operations from reactive to proactive, from intuition-based to data-driven.
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The Evolution of Financial Spreading
Remember the days of manually inputting financial statements into spreadsheets? For many lenders, this tedious process still consumes countless hours. Financial spreading—the process of extracting and organizing financial data into standardized formats for analysis—has traditionally been labor-intensive, error-prone, and a significant bottleneck in the lending workflow.
Enter automated spreading tools like BeSmartee’s FlashSpread. These solutions use advanced technologies to extract relevant financial information from tax returns and financial statements, automatically categorizing and standardizing the data for analysis. What once took hours now takes minutes, with significantly improved accuracy.
The difference between manual spreading and automated spreading is like the difference between calculating your route with a paper map versus using GPS navigation. Sure, you could do it the old way, but why would you when there’s a faster, more reliable option?
Business Intelligence: The Next Frontier
While automated spreading has revolutionized data collection, business intelligence (BI) transforms how lenders use that data. BI tools aggregate information from multiple sources, apply analytical models, and present actionable insights through intuitive dashboards and reports.
For commercial lenders, BI can:
- Identify patterns in borrower financial health that might indicate future issues
- Segment portfolio performance across industries, regions, or loan types
- Compare current applications against historical data to predict outcomes
- Flag potential compliance issues before they become problems
BeSmartee’s FlashSpread product currently offers a collection of key standard reports that address common client needs. Additionally, our team can develop customer reporting through our business intelligence tools when specific requirements arise.
Looking ahead, we plan to give clients direct access to these BI tools as part of our product roadmap, allowing for greater flexibility and self-service options in reporting.
The Combined Power: Beyond Efficiency to Intelligence
When automated spreading meets business intelligence, the value proposition extends far beyond time savings. This technological marriage creates a foundation for truly intelligent lending.
Consider the traditional lending process: a borrower submits financial documents, a lender manually enters the data, performs ratio calculations and trend analysis, and makes a decision based on guidelines and experience. This process is reactive and limited by the individual lender’s capacity to analyze information.
Now imagine this enhanced workflow: the borrower submits documents, an automated system extracts and organizes the data, then applies advanced analytics that consider not just the borrower’s information but patterns from thousands of similar loans. The system flags potential issues, recommends appropriate structures, and even predicts future performance scenarios. The lender reviews this comprehensive analysis and focuses their expertise on relationship building and judgment calls—the human elements that truly add value.
The most valuable resource in lending isn’t money—it’s attention. These tools free up mental bandwidth from routine tasks so lenders can focus on what machines can’t do: understanding the borrower’s unique situation and building relationships.
The SBA Small-Dollar Lending Market: A Case Study in Technology’s Impact
The Small Business Administration (SBA) 7(a) market provides a compelling example of where automated spreading and business intelligence technologies can deliver significant competitive advantage.
According to Bank Director, a recent industry analysis showed that small-dollar loans of $500,000 and below represent a growing segment, reaching more than $8 billion in annual volume as the SBA has worked to make these loans more accessible. However, this segment presents unique challenges that technology can help address.
Higher Risk Profile: Historical data shows default rates for small-dollar SBA loans are twice that of large loans, with significantly higher loss severity rates. This results in expected credit losses approximately three times higher than larger loans, creating a critical need for more sophisticated risk assessment tools.
Operational Efficiency Requirements: With average loan sizes roughly ten times smaller than large loans, banks must dramatically scale down their operational costs to maintain profitability. Automated spreading tools directly address this challenge by reducing manual processing time.
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Market Consolidation: The competitive landscape has transformed dramatically, with the top 50 lenders now controlling nearly 80% of the small-dollar market, up from about 70% five years ago. This consolidation reflects the advantage that technology-enabled lenders have in this space.
As Bank Director concludes, “The small-dollar SBA lending market stands at an inflection point,” and the question for lenders isn’t whether to participate, “but how to build an operation that can compete effectively in this transformed” landscape. Automated spreading and business intelligence tools represent critical components of that competitive operation.
Real-World Impact for Commercial Lenders
For commercial lenders specifically, this technological convergence addresses several persistent challenges:
Complex Financial Structures: Commercial borrowers often have intricate financial arrangements involving multiple entities, revenue streams, and obligations. Automated spreading with integrated BI can untangle these relationships and present them clearly.
Industry-Specific Analysis: Different industries have unique financial patterns and risk profiles. Advanced BI can apply industry-specific benchmarks and analysis that would be difficult for individual lenders to maintain.
Portfolio Management: Beyond individual loans, lenders need to understand their overall exposure and performance trends. Integrated systems can provide both loan-level and portfolio-level insights.
Regulatory Compliance: With ever-increasing regulatory scrutiny, having systems that document decision processes and flag compliance issues becomes invaluable.
Implementation Strategies: Starting Today
If you’re intrigued by the potential of these technologies, here’s how you can begin implementing them in your lending operation:
- Start with a Clear Assessment: Before investing in any technology, document your current spreading and analysis processes. Identify pain points, bottlenecks, and areas where errors commonly occur.
- Choose the Right Entry Point: Many lenders begin with automated spreading alone, mastering that efficiency gain before adding BI capabilities. FlashSpread offers a practical starting point that aligns with future BI integration.
- Consider Integration Requirements: Evaluate how new tools will connect with your existing loan origination system, document management, and other critical infrastructure.
- Develop an Implementation Roadmap: Technology adoption works best with a phased approach. Plan for initial implementation, testing, training, and gradual expansion of capabilities.
- Invest in Training: New tools require new skills. Budget time and resources to ensure your team can maximize the value of these investments.
- Monitor and Measure Results: Establish key performance indicators to track improvements in processing time, accuracy, and decision quality.
Looking to the Future: The BeSmartee Vision
As BeSmartee develops its business intelligence capabilities for FlashSpread, users can anticipate enhanced features that will further transform lending operations. The roadmap includes predictive analytics that can assess future borrower performance, scenario modeling tools that evaluate loan structures under various economic conditions, and customizable dashboards that provide instant portfolio insights.
This evolution represents a shift from tools that simply automate existing processes to platforms that fundamentally enhance lending decisions through data-driven intelligence.
Roundup
In today’s lending environment, competitive advantage doesn’t come from marginally better interest rates or slightly faster approvals. It comes from making consistently better decisions based on deeper insights while providing exceptional borrower experiences.
The convergence of automated spreading and business intelligence creates precisely this advantage. By implementing these technologies, commercial lenders can process more applications with greater accuracy, identify the best opportunities while avoiding hidden risks, and focus their human expertise where it adds the most value.
For forward-thinking lenders, the question isn’t whether to adopt these technologies, but how quickly they can implement them to stay ahead of competitors who are undoubtedly considering the same path. With solutions like FlashSpread evolving to incorporate business intelligence capabilities, there’s never been a better time to embrace this technological transformation.
The future of commercial lending isn’t just automated—it’s intelligent. And that future is arriving now.
Reach out to our loan technology experts to learn more about FlashSpread’s financial spreading solution today.
