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The benefits of construction loan software

Abrigo
September 28, 2022
Read Time: 0 min

Construction loan softwares are a windfall of efficiency for financial institutions.

Essential technology for modern lending and credit departments. Learn more about what they are and how they help banks and credit unions gain needed efficiency in the loan administration process.

You might also like this webinar, "How to manage a high-performing construction loan portfolio."

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What is construction loan management software?
Increased efficiency and better process management

Construction loan software is a type of software that banks or other financial institutions use to manage their loans and keep track of all documents and transactions. Construction loan management software can help keep a financial institution organized, streamlined, and prepared for anything, including audits. These types of software are not just simple accounting programs that track finances. Instead, they are a specific program for lending institutions and their needs.

The basic functionality of construction loan management software

Financial institutions use construction loan management software to manage construction loans. The software helps financial institutions manage the construction loan process, from initiation to closing. 

An essential function of this software is that it helps in identifying potential risks and threats related to construction lending. With automatic notification and overfunding alerts, risk assessment and mitigation of risk becomes effortless.

How it increases efficiency and reduces costs

Construction loan management software has given many financial institutions an advantage over the last few years. By automating many aspects of the construction lending process, institutions can save days compared to the manual process and speed up cycle time.

It is a fast-track solution for institutions that helps them manage their loans and project finance process from start to finish. It includes all the stages of approval, disbursement, inspections, and more. The software also regularly provides detailed reports about project status, which helps keep track of payments and collections. So be ready for any meeting with customizable reporting at your fingertips. It is an effective tool that financial institutions can use to reduce costs and increase efficiency levels.

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How does construction loan management software help banks and credit unions?

This new technology can help institutions in many ways:

  • Increase draw interest income: The software enables you to accelerate your cycle times so that you can fund draw requests days earlier than before. 
  • Increase efficiency: By eliminating spreadsheets from the drawing process, having automated calculations and digital approvals at your fingertips means your internal processes are efficient and streamlined. 
  • Mitigate risk: Detailed audit trails help your financial institution to be ready for anything. Automatic alerts also make sure you catch any mistakes before they become issues.
  • Enhance the borrower experience: Financial institutions love having the option of offering a mobile tool to borrowers, builders, and inspectors. It improves business relationships and satisfaction.
  • Timely reporting: Many financial institutions need specific data on their loan portfolio. With custom reporting, construction loan management software can help get the information you need to interested parties with a few buttons. No more scrambling to compile spreadsheets.

The reasons why banks and credit unions should invest in this technology

This type of software can help you by providing better insights into your construction portfolio, and it can also help you understand your risk exposure. It helps in improving efficiency and profitability. It also helps in achieving regulatory compliance and reducing risk. Banks and credit unions are increasingly investing in construction loan management software because they have seen the benefits of this investment. They have realized that it improves efficiency, reduces risks, and increases profitability.

How to choose the right construction loan software 

You need to consider a few things before choosing this type of software. First, find out what kind of features the software offers and what its user interface is like – look for a user-friendly product.  Second, ensure it’s compatible with your systems and processes.  Third, check how much customization and flexibility it offers and the level of product support.

How to implement a successful construction loan management strategy 

A construction loan management strategy can be an excellent way for your institution to maintain and grow its customer base. Is your bank or credit union looking to expand its construction lending portfolio?  Successful construction loan management strategies are in place before the need arises. A financial growth strategy will help you maintain and grow your customer base and construction lending portfolio.

Stay up to date on credit risk. Watch the webinar, "Credit risk management: Best practices & examiner priorities in uncertain times"

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About the Author

Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo’s platform centralizes the institution’s data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth. Make Big Things Happen.

Full Bio

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.

 

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Coupled with our lending suite, Construct and +Pay from BankLabs enable end-to-end automated residential/commercial construction loans.

Read the press announcement

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