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Business Loan CRMSo, you’re a small business owner and the business you own is a business lending firm.  You might be brokering deals to direct lenders, participating on files with direct lenders, lending out your own money, or you might be doing all three.  No matter what type of business lending company you have, it’s going to require business loan CRM software to be successful.  You may ask yourself why it is “required”?  Well to be honest, it’s not! If you want to close a very small amount of loans each month and create more stress for yourself, you don’t need anything.  If you want to really sink your teeth into the business finance industry and make hundreds of thousands of dollars (maybe even millions), you are going to want a system that not only works for you and keeps you and your team organized, but also a system you can scale with and that speaks your language.

Here are the top CRM functionalities that business lending companies like yourself have told us they simply can’t live without.

Dedicated CRM for the Business Finance Industry

Before you do anything when it comes to software, you must first find the software companies who offer dedicated technology to your sector, in this case, business lending.  A generic CRM or software platform is simply not going to cut it.  A software platform that speaks your language (has business finance dedicated technology) is going to understand you better, and you will understand it better.  It will also motivate you to actually take the time and learn the software platform.

We have found a 15% increase in productivity and in some cases a 20% increase in conversions from taking business lending institutions from a generic CRM software platform to a dedicated business finance lending CRM system.  In most instances, the staff of the dedicated business loan CRM platform came from the business finance sector, and know how to communicate with you in ways that only someone in the sector can understand.

Lastly, if you have started at the bottom as a one man brokerage shop and you have big plans to grow, potential outside brokers, ISO’s, investors, and others will want to see what you have been using to run your business and will most likely make a judgement call on whether or not they work with you.  Impressing the money is a very real thing and foundational software definitely plays into that.

Advance Opportunity Management

As we all know, you can have multiple advances for one merchant.  Sometimes they can be at the same time, but most often, multiple advances come in the form of a renewal or an add-on.  There are buyouts and stacking and other types of advances as well but the point is, over the course of your relationship with that merchant, you may have funded them 2, 3, 5 or even 10 advances.  How are you supposed to manage all the documents, contracts, bank statements, and tax returns for each one of those advances? Herein lies the need for advance opportunity management within your business loan CRM software.

With each advance that you give a merchant, for the most part, the underwriting process is pretty much the same.  You have to collect most recent bank statements and the funder is probably going to pull another credit report to make sure nothing has changed.  Tax returns, depending on the timing of the renewal advance will pretty much be the same.  For each one of these advances you want to make sure there is a clear way to separate each advance for that one merchant.  Make sure there is a place to upload documents to the merchants account but NOT at the merchant level, more so at the advance level.  If you have docs for each advance then you need to know which documents are tied to which advance.  This goes for bank statements, tax returns, credit reports, decision logics reports, and any other document or data point that is needed to underwrite a file.

Lender Database Management

This one is more for the brokers out there but lenders may find this valuable as well.  At any given time you may have ISO agreements with 5 to 10 lenders. In most cases these lenders have different underwriting guidelines, what they accept and don’t accept, what they will fund and what they won’t, etc.  It’s hard to keep track of each lender, what their guidelines are, and how much you have funded with each one of these lenders.  If you are having success with a certain lender or a group of lenders I would imagine you are going to want to know why you are having that success, so that you can replicate it. Having a lender database built directly into your business loan CRM will take care of that for you.

Be sure to ask the software company if their lender management database technology ties directly to the merchant advance so you can look into each lender and see how many advances you are currently working with that lender, how much you have funded with that lender, and the ability to take notes on that lender on what their underwriting guidelines are.  This will give you and your team the analytics you will need to make the best decision when sending a file to a lender.

Lastly, some lenders require you to submit deals via their online portal. They do NOT allow email submissions.  Not all business loan CRM software companies will have integrations with these lenders as some won’t allow it.  However, some do have an open API (Application Programming Interface, or integration) that the CRM company can work on so you can submit files directly out of the CRM.  This one shouldn’t be a deal killer but if they have a few it definitely makes your life a bit easier.

Lender Submission Technology

This one is also more for brokers and syndicators than funders.  Brokers and syndicators, it’s a ton of work to take a file, package it up, and then send it one at a time to each funder you want to work with. Now, here at Centrex Software we will be the first to tell you that you should maintain a high level of loyalty with funders that have approved your deals.  It’s good business.  With that said, at times there are files that fit within the wheelhouse of a different funder.  Within your dedicated business loan CRM you should make sure there is functionality that allows you to package up a file and send it to multiple funders at the same time.

Each lender submission should track back to that lender within the lender database management section for lender performance monitoring.  Another small addition to lender submission technology is the submitter email address.  Make sure the business loan CRM company has the ability to either have the email address be whomever is logged in submitting the file, or a single email address no matter who is in the software submitting a file.  This will keep consistency in your business when submitting new merchants to funders.

Syndication/Participation Tracking and Access

We have found that brokers becoming syndicators is becoming very popular and is happening quickly.  Depending on the coolaid you have been drinking, syndication and funding is where the real money is.  Once your business lending brokerage shop gets to a certain point and has developed good relationships with funders, those funders may start asking you to start participating on certain files you send to them.  When I say participating, I mean shelling out some of your own money as a portion of the overall advance for that merchant.  So if the advance is for $50,000, the funder may allow you to participate 10% which in this case would be $5,000.  This is where tracking your own money becomes a very important need.

Be sure to ask the business loan CRM company if they have the ability to track syndication partners and participation amounts.  Some of the data points you are going to want to see are:  Participated amount, participated %, expected income, expected pay-off date, estimated % paid down, right to receive (RTR), and number of payments.  If they have more than this, great.

Lastly, and this is more for funders who have syndication partners, but be sure to ask the business loan CRM company if they have the ability to pay syndication partners right out of the CRM.  This ability should also not be a deal killer but I can guarantee you that your syndication partners would be very excited to know they are getting paid on a daily basis just like you are.  Something to think about.

Auto Triggers and Drip Email Marketing

One of the main reasons to buy software in the first place is the simple fact that it performs tasks automatically for you helping you close more deals.  If you are one of those shops that calls every single one of your merchants without any sort of drip email marketing strategy or auto trigger strategy, you are 100% leaving money on the table.  This brings to the surface an auto drip and trigger follow up strategy.

Most but not all, CRM applications have the ability to send out emails on a one off basis.  This however, still requires you to push a button, write an email and then push another button to send that email.  Time is money as they say. Be sure to ask the CRM company you are speaking with if they have the ability to create auto drip emails based on a status change, or maybe the time the merchant has been in a certain status.  On top of that, ask the business loan CRM company if they have the ability to automatically send an email to a co-worker or merchant when something in the software happens. One great example, send an automatic email to the merchant when they are 50% paid down on their advance. Do I hear RENEWAL!!??

Now, having one automatic email go out isn’t enough is it? Those of you that know what I’m talking about can see the writing on the wall. You don’t want just one email to go out automatically, you want emails going out every single day, every single hour of every single day to your entire portfolio to increase those conversion rates.  Be sure to fully understand the capabilities of your business loan CRM and if it has the ability to send recurring auto drips out to your database and staff based on filters.  This will change your business like you have never seen it change before.

ACH Portfolio Processing and Monitoring

We are going to switch it around a bit as this one is more for funders.  If you are in fact a funder in the business finance space and offering the MCA (Merchant Cash Advance) or RBA (Revenue Based Advance) product, managing a daily/weekly ACH portfolio is a must.  The question is will you make it easy on yourself or will you make it tough on yourself?

Making it Tough

Several funders I speak with for the first time rant and rave about how great their relationship is with their local community bank or credit union as it relates to ACH processing.  I believe them but here is what they didn’t know.  Brick and mortar banks have a “Comfort Zone” when it comes to the amount of daily/weekly ACH drafts you will be doing.  Along with the volume, they also have a “Comfort Zone” on the dollar figure being drafted.  If you are in fact using your business bank to process ACH drafts, as you grow your funded portfolio to where you are doing several ACH drafts each day and the amount starts to get into the several thousands, expect a call from your banker telling you that you need to find a different ACH solution.  Yes that’s right, your awesome bank that you have a great relationship with just respectfully asked you to get lost.

On top of having limits on what you can do with your bank as it relates to ACH drafts, most banks won’t have a direct integration into your CRM software.  Most banks won’t even allow it.  Therefore, you will be forced to login to your bank each day/week and process your ACH drafts manually.  Yeah…….then you have to account for it every day and month etc.  It’s a ton of work.

Lastly, using your bank or credit union for ACH drafts is simply not best practices in the industry for one very important reason.  If you use your banks ACH processing services and you also have your business checking account with all your funds with that same bank, what do you think the bank has direct access to if a merchant or a group of merchants goes nuts and files all sorts of complaints and charges back thousands of dollars based on your ACH drafts?  Thats right…your money!!  Using the same bank for business checking account services and ACH/CC processing services is a doing business 101 no-no for the simple fact that if something goes wrong that bank has the ability to freeze all your funds.  If this happens you now not only have no ACH processing capabilities, you also have no access to the funds you need to run your business.  I have personally seen this put lending companies out of business.

Making it Easy

There are several third-party ACH processing services out there that will ACH draft your funded merchant and then deposit the funds directly into your business checking account.  Why is this better? Well most third-party ACH processors have full integrations into business loan CRM software companies.  This means that when you setup a daily ACH draft to happen, it happens automatically and each day without you touching a single thing.  Along with automatically drafting the merchants account, most CRM platforms will track the processed date, the cleared date and will perform accounting on the funded portfolio as a whole.  Now you have taken three very important risks out of your business model:  Manually having to draft one client at a time saving time which is money, protecting your bank account funds from something going wrong, and having accounting records populate automatically as drafts happen each day or week.  Much, much easier.  The only thing to look out for with third-party processors is their float time.  Industry standard is about 4 to 6 business days.

In conclusion, having a solid operational software platform to run your business is always a good idea.  Having a dedicated business loan CRM platform for your lending company is a MUST.  You will close more deals, retain more of your top sales people, and show a greater return on your investment at a faster rate.  Oh yeah……and lower your stress levels by about 200%.  We wish you the best of luck.

Trey Markel

Trey Markel is the VP of Sales & Marketing and was one of the first three employees hired at Centrex Software when it was founded back in 2008. Trey has spent his entire career in FinTech and helping business owners solve simple and complex problems with software and technology. Trey has a bachelor of science degree in business administration from University of the Pacific.

Trey Markel is the VP of Sales & Marketing and was one of the first three employees hired at Centrex Software when it was founded back in 2008. Trey has spent his entire career in FinTech and helping business owners solve simple and complex problems with software and technology. Trey has a bachelor of science degree in business administration from University of the Pacific.

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