How Lenders Find More Qualified Customers…and Approve Them for Credit Faster

With the right automated credit decisioning strategy, lenders can improve underwriting accuracy and avoid overlooking qualified borrowers.

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By 
Jon Fry
 | 
 | 
May 13, 2022

It’s no secret that the traditional credit decisioning process often fails small-to-medium-sized businesses. In the past, underwriting new loan applicants has required manual reviews of customer data — from cash flow records to credit scores. When SMBs aren’t able to fulfill these requirements, it’s all too easy to get turned away due to a lack of detailed documentation. Even when an SMB is qualified for a loan, decisioning isn’t accurate enough— or fast enough — to fulfill their needs.  

In today’s economy, fintechs and lenders want to scale their credit underwriting process to acquire more customers and accelerate growth. SMBs want to get the loans they’re qualified for, without the red tape. In short, both parties involved are looking for a faster, more advanced solution to credit underwriting.

Strategies for Automated Underwriting 

Automated credit decisioning takes underwriting to the next level by pairing smart data with modern decisioning tools. Embedded lending platforms provide an automated approach that gathers data across a range of proprietary and public sources. By gaining full visibility into each SMB applicant’s financial outlook, lenders and fintechs can expertly identify qualified SMBs

Even though automated decisioning increases the efficiency of credit checks, you’ll still need to land on the strategy that makes sense for your business. Smarter lending means figuring out what automated processes you’re going to use, and what types of data you want. 

Here’s what fintechs and lenders can do to identify more qualified applicants and approve more of them: 

  1. Access Better Data. With automated underwriting, data aggregation is a key component of accurate credit checks. Without a diverse set of data sources, you may have data that looks accurate — but still not necessarily comprehensive. To get the full picture of an SMB’s qualifications, you can leverage aggregated data from a variety of sources to paint a complete picture of your borrower. These can include traditional sources like KYC, KYB, document verification, or alternative sources like payroll, accounting, and cash flow data. 
  1. Customize Automated Decisioning Workflows
Intelligent data use creates smarter lending. With Lendflow’s customizable credit decisioning workflows, lenders benefit from automated decisioning that combines maximum accuracy with optimal efficiency. Automated decisioning not only powers superior evaluations, but yields fewer manual reviews. 
Automated credit decisioning begins with data checks being performed in underwriting workflows that can be saved and customized at the lender’s discretion. By sequencing the most critical data points in the most logical order, customizable decision trees allow lenders to avoid unnecessary data checks — and associated costs — and more accurately qualify applicants according to in-house underwriting policies. With the most important data checks at the front, you can eliminate wasteful data costs by rejecting an application if it fails at an early stage of your workflow.
Underwriting has never been this precise, cost-effective, and fast. 
  1. Rank Applicants with Scorecards. Scorecards are an effective way to compare loan applications with each other, using a standardized rubric. Fintechs and lenders often need to rank each credit applicant based on their own proprietary criteria. Lendflow’s automated Credit Decisioning Engine features custom or pre-built templates, which enable lenders to assign weight to each data point and rank credit applicants in seconds

Changing Your Lending Story with Lendflow

The latest credit decisioning engines are ushering in a new era of advanced underwriting. Whether you’re a fintech or a traditional lending institution, Lendflow’s Credit Decisioning Engine sparks growth and moves your business forward. With Lendflow, you can collect innovative and traditional credit data in real-time to conduct more precise credit evaluations.

Once you get the right data, Lendflow offers innovative ways to use it. Our engine features dozens of aggregated data points to provide the clearest picture of your applicants. For fast and accurate underwriting, Lendflow also offers custom decisioning workflow and ranking templates. To learn how you can change your story with Lendflow, schedule a conversation with one of our team members today! 

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