For many years, SBA lending has looked the same. Despite significant technological innovation and cloud transformation, many of the steps and processes involved in originating small business loans have remained stuck in the past. Unfortunately, this has prevented the majority of lenders from growing their client bases and bottom lines. Sound familiar?

4 Ways to Improve Efficiency

Historically, lending hasn’t been the most efficient or modern process. Admittedly, there’s a lot that goes into the underwriting and due diligence processes, but slow is the only way to describe it. 

Thankfully, the tides are changing. Thanks to new technology and shifting perspectives, there are now ample opportunities to improve efficiency and smooth over rigid processes. Here are a few ways SBA lenders can follow the lead:

• Recruit the Right People

When it comes to building any business, people are the gasoline to the engine. Without the right people on your team, even the best processes will come to an abrupt halt. However, if you look at most small business lenders, you’ll discover that they don’t have any formal process for consistently recruiting, training, developing, and retaining skilled loan officers and other team members. This is problematic.

Your business might be fine right now, but there are no guarantees that your best people will still be here in 12 months, two years, or five years. You must constantly recruit top talent into the fold so that you can improve over time. 

A good recruitment strategy starts with your brand. While factors like competitive pay and benefits certainly matter, you need a clearly defined value proposition and online web presence that people connect with. Because as soon as a talented loan officer sees that you’re hiring, they’re going to start by vetting your company online. If you don’t meet the smell test – meaning they could see themselves being a part of your team – you’ll never consistently recruit top talent.

As you collect applications and conduct interviews, analyze applicants based on their soft skills. You can teach hard, technical skills, but it’s much more challenging to teach someone how to be disciplined or show attention to detail. Hire for the right natural skills and then train them to master the technical aspects.

• Invest in Loan Origination Software

If you’re still using manual lending processes, then you’re probably experiencing a lot of friction. This might include wasting time on manual/duplicate tasks, rekeying information, double-checking for accuracy, inputting inaccurate data, and switching between multiple platforms. In other words, you’re spending all of your time and energy addressing backend challenges when you should be out there developing relationships with clients.

The good news is that there are solutions designed to address each of these problems. More specifically, there’s something called loan origination software.

Loan origination software comes in a variety of shapes and sizes, but SPARK is quickly becoming known as the industry leader. The platform’s entire goal is to end complex and outdated lending processes and replace them with smooth, automated activities. They do this by unifying every aspect of the loan origination process, including lead capture, screening, and underwriting, which results in a 30 percent reduction in loan origination time.

• Adopt a Forward-Looking Perspective

Traditionally, small business lending decisions have been made by looking at the past and letting that data influence outcomes. And while there’s still something to be said for keying in on past data, efficient lenders are beginning to adopt a more forward-looking perspective. Understanding that 2020 was a tough fiscal year for even some of the healthiest businesses (for factors outside of their control), it may be wise to cast a broader net when underwriting.

• Get the Little Things Right

At the end of the day, it pays to get the little things right. In fact, efficiency is usually the byproduct of doing hundreds of small things right.

For example, do you really need all of your loan officers to come into one centralized office five days per week? Would your team be able to get more done if they worked from home?

Are there ways to eliminate useless meetings? Can you cut down on back-and-forth email conversations by picking up the phone and making a call?

Success is found in the details. Get the little things right and efficiency will follow.

Take a Step Forward

Every SBA lender has its own unique approach and process. However, if you’re willing to recruit the right people, invest in loan origination software, adopt a forward-looking perspective, and get the little things right, good things will happen for your business. It won’t always be easy, but it will be much faster, smoother, and more efficient.