How long does it take to close a commercial loan?

Sageworks
September 26, 2017
Read Time: min

Banks have a wealth of information available to them, and if they use the right tools to dissect that information, they can make major process changes that improve what matters most to customers – both customers of today and tomorrow.

For example, according to a recent poll during the Sageworks Risk Management Summit, 39 percent of bankers say it typically takes their financial institutions from three to six weeks to close a new commercial loan, and another 36 percent said it takes more than six weeks. Only 4 percent of the more than 170 bankers polled said they can close a commercial loan within a week, and 22 percent estimated it takes two to three weeks.

Three to six weeks is an acceptable timeframe for many commercial customers, but there are banks that do it faster, and some customers may be expecting a faster turnaround.

Garver Moore, principal consultant with Abrigo Advisory Services, notes that millennials are entering career phases where they are starting new businesses and need access to capital.

“In addition to new capital sources, including web pages where supporters can provide money without recourse to equity or debt, this generation has different expectations for their commercial relationships,” Moore says. “The trend seems to be pointing toward ‘screaming stuff you want into a device,’ and most markets are moving to fulfill those desires.”

 
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During the Sageworks Summit, Moore described that the way for financial institutions to solve for faster turnaround times and more convenience for their commercial borrowers is to dissect the three to six weeks that it takes to close a loan and see exactly what the hang-ups are and what is behind them. By using the information already available to them, banks can develop insights and action plans to move a deal toward approval more quickly.

Read more about traits of millennial business owners here. And learn how to grow the loan portfolio and remain competitive in the small business lending space by reading this whitepaper, “Smarter, Faster Lending.”

 
About the Author

Sageworks

Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest real-time database of private-company financial information in the United States. The company was acquired in 2018 and is now part of Abrigo.

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About Abrigo

Abrigo is a leading technology provider of compliance, credit risk, and lending solutions that community financial institutions use to manage risk and drive growth. Our software automates key processes — from anti-money laundering to fraud detection to lending solutions — empowering our customers by addressing their Enterprise Risk Management needs.

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