Promoting efficiency, competition and better customer outcomes, Lend co-founder and CEO Bill Baker explains how a new matchmaking service can shave 35 hours of each SME loan application
On average, it can take a broker anywhere from 20 to 35 hours to place an SME client with a suitable unsecured lender. As all brokers know, that time is filled with phone calls, scenario workshopping, credit policy research and a lot of waiting – all with the aim of securing the best possible deal for the client.
Recognising the time burden of this essentially unpaid process – not to mention the multiple applications a broker could expect to submit – entrepreneur Bill Baker co-founded Lend.
Identifying that there were as many as 12,000 brokers working around the inefficiencies that currently exist in SME finance, the Lend team developed an online platform that would matchmake borrowers with a suitable lender.
It does so without blemishing the applicant’s credit score and saves a broker up to three working days per application. The Lend platform automates the manual process of matching a lender to an SME, using a sophisticated combination of AI and analytics.
This means the system can analyse bank statements in the same way a credit manager assesses cash flow; it’s intelligent enough to determine whether a customer can service the loan they want, and it then applies each lender’s credit policy matrix to the scenario to generate a ranking of the most appropriate lenders for the task.
Crucially, AI means the platform can learn from the outcomes it generates, to keep ahead of any possible changes to lender policies.
The icing on the cake is a centralised dashboard, single log-in and standardised, single application for all lenders on the system. Baker says the platform, which is due to launch this month, is unrivalled in its space.
“For us it’s about finding the most suitable lender first time every time. We have developed our own lender logic based on a number of data points to generate a unique profile. In addition to this, all lenders have volunteered information on their product matrix, giving us leading edge accuracy,” he explains.
According to Baker, the only barrier to a lender being part of the platform is if their technological infrastructure isn’t up to scratch. Throughout the process, the broker retains full control, with the added ability to specify or exclude lenders based on how they and their customers like to work and the relationships they have with certain brands.
Commission payments to brokers are also automated through the platform to ensure that remuneration is timely.
“We built an independent system that gives the broker full control to choose the best solution for their customer. Or, if they have a preference for a certain lender and want to send all their deals there, they can do that. Control and transparency are important,” Baker says.
As a tech rather than finance company, Lend is about more than just lead generation.
If the firstchoice lender doesn’t want to take the deal, the system sends it to the second most appropriate lender – a great outcome for the borrower and more settlements for the broker.
“Initially we would get a lead through Google and feed that through the system; it was just distribution. Since introducing our new platform, with our own leads, the conversion-to-settlement has increased by 70%, which is a big number, so the platform works,” Baker says.
The premise sounds simple, but the idea has been developing since Lend was officially launched in 2016.
Over almost three years, the team has been heavily engaged in an extended R&D process, during which they discovered that the greatest pain points for brokers and their SME customers were speedy credit decisions, pricing and real time application updates.
Tackling these hurdles has been key to the Lend proposition.
“We didn’t go into this industry lightly. As with all the markets we go into, we did a lot of research, and we realised that if we are going to succeed purely on business loans we must start by focusing on one type of product and doing it well,” says Baker.
While speed is a natural benefit of the platform, other broker pain points required more deliberate solutions. For example, to assist brokers with the pricing component, Lend created a tool to compare and calculate the cost of each available loan, which is a similar philosophy to that of the SMART Box, implemented in Australia last year as part of the Code of Lending Practice.
To keep brokers in the loop on an application’s progress, the platform sends email and SMS alerts, accessible via their mail inboxes, web browsers or mobile dashboards while in the office or on the road.
A broker support team is also available by phone for additional support. By forging a closer alliance between brokers, borrowers and lenders, Lend also provides a means of distribution for new brands to offer loans in an efficient and effective way.
At the time of going to press, more than 12 lenders had been confirmed to feature on the Lend panel – including all six of the Code of Lending Practice signatories – and the list is growing by the week. “This year is going to be the year of collaboration,” says Baker.
Firstly, speed and technology will pave the way for that to happen, and secondly the broker will be empowered to access multiple lenders, providing a better customer experience and meaning their client gets an answer more quickly.
“That is crucial when running a business – it allows the SME to secure funding and move on with their day-to-day activities.
Also, Lend allows businesses to have access to the smaller lenders that have slightly different lending criteria and gives them the opportunity to compete.”
There’s a further element of perfect timing in Lend’s scheduled debut. The platform will be launched in a post royal commission lending environment in which bank policy has tightened but brokers are rushing to diversify their suite of services ahead of potential remuneration changes.
However, Baker maintains a positive outlook, saying that unsecured lenders – whether alternative, online or nonbank – now promote so many benefits to those who use them that they are actually becoming first-choice sources of finance for business owners.
“The unsecured lenders are the first choice for SMEs now because of the speed and simplicity of getting funded, so the outlook is bright,” Baker adds.
“As well as the benefits for broker and lender, the SME gets a better deal, a better experience and access to funding. All those wonderful things you would expect of a technology company, and ultimately the customer wins and the broker wins because there are more deals happening, so they continue to use the system.”
Ahead of Lend’s official launch, the team is already working on ways to expand the platform with equipment financing, invoice factoring and “all the other business funding solutions” on the drawing board.
“We intend to be the go-to platform for every finance broker. A one-stop shop offering multiple finance solutions. For now, it’s business loans with a number of exciting product offerings nearing completion,” Baker says.