Business Loan Approval Times “Shredded”


[ad_1]

Decisions that would normally be made a day or two before COVID took a few weeks or even more, said David Gandolfo, financial broker and CAFBA’s chair of advocacy.

“It took a lot longer but it’s starting to improve,” Gandolfo said.

“They (the lenders) are like us, they work from home, files are emailed and retrieved remotely, and questions and queries aren’t resolved in a minute like they would otherwise.”

Banjo is an SME lending specialist that began operations in November 2015 and offers businesses unsecured loans of up to $ 500,000. Banjo CEO Guy Callaghan said the company strives to give customers answers within the day, even if they are not approved.

“When you think about the opportunity cost of waiting to get that money to fund growth, stability or profits… it’s an eternity,” Callaghan said.

“They don’t want to be hassled to make a decision, even though that decision is, ‘No, we don’t want to loan you,’ they don’t want to wait five weeks for someone to tell them that. “

With the backlog of mortgage approvals compounded by a rush of applications amid a booming housing market, the dynamics affecting the business lending market are different.

The pipeline of commercial loan and equipment approvals has become bogged down by the shift to working from home, the shutdown of offshore processing facilities and a resurgence of interest in regulatory requirements, including obligations to address money laundering, Gandolfo said.

“It just blew things up,” he said.

“What would normally happen in a day or two would take a few weeks or maybe even longer.”

The escalating delays became noticeable around the middle of 2020, peaking shortly after banks pulled a number of simplified loan products, treating all customers as if they had just stepped off the street.

“There weren’t any simplified approvals of up to $ 150,000, even though they knew you. Everyone is evaluated as if they are new to the bank, ”Gandolfo said.

Judo Bank co-founder and co-CEO Joseph Healy says delays in credit approvals for business loans are a big problem that has not improved.

“There is a big disconnect between sales and marketing and the reality of the customer,” Mr. Healy said.

“One of the reasons judo exists is because it took so long for borrowers to get answers from the banks. I can think of many examples where it took six weeks to two months just to make a decision. “

[ad_2]