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9/21/2022

Sandra Graise

The Importance of a Purpose-Built Loan Origination System for SBA Loans

The Need for a Purpose-Built System The Importance of a Purpose-Built Loan Origination System for SBA Loans

The loan origination process is crucial for both borrowers and lenders. It's the foundation of the loan life cycle, starting from the initial application to the final closing. With the rise of digital technologies, loan origination systems have become the backbone of the lending industry. These systems help to digitize and automate the loan process, enhancing the borrower experience, reducing data entry, maintaining data integrity, and automating redundant workflow processes.

However, not all loan origination systems are created equal, especially when it comes to Small Business Administration (SBA) loans. SBA loans have unique requirements and complexities that require a loan origination system built specifically to tackle these challenges.

The 590-page SOP, form 1919, and its complex requirements, SBA loan authorization, and the requirement to know every individual owner are just a few of the processes that are still primarily addressed manually. The business logic required to automate the 1919, for example, requires a software system to understand the SBA's definition of an affiliate and the details of each applicant business and its owners, as well as every guarantor and affiliate. Additionally, SBA loans have additional eligibility requirements such as credit elsewhere and size standards.

Lenders who use loan origination systems not built from the ground up to address these SBA specific processes are forced to find workarounds, which are not ideal solutions. Instead, lenders need loan origination systems specifically designed to tackle the key issues they face, including reducing data input time, mitigating the risk of incorrect information input, decreasing time spent on redundant tasks and forms, improving the borrower experience by keeping the progress transparent, and expediting loan closings.

For SBA departments, finding a loan origination system designed by SBA industry experts is essential. These experts understand the hurdles faced by the industry and have the solutions to overcome them. A purpose-built loan origination system not only streamlines the loan process but also mitigates risk and helps lenders achieve compliance with regulations.

In conclusion, the loan origination process is the foundation of the loan life cycle and must be handled with care. A loan origination system built specifically to address the unique challenges faced by SBA lenders is essential for success. LendUX is a loan origination system designed by SBA experts to solve the problems that keep lenders up at night. With LendUX, lenders can experience effortless SBA loan origination, reducing data input time, eliminating the risk of incorrect information input, streamlining redundant tasks and forms, providing a seamless and transparent borrower experience, and closing loans faster. Visit LendUX.com to learn more.