The second round of the Paycheck Protection Program (PPP) sees lenders trying to alleviate the pain points that plagued round one—leaving millions of small businesses in liquidity limbo.
With one-third of small businesses on the brink of closure, the first round of payments was a hectic period for banks. 70% of small business applied for PPP on the first day. The back-office pressures associated with processing this loan surge fell largely on lenders.
In a sense, this was a perfect storm: Lending institutions were already dealing with COVID-19-related frictions. From strategically implementing a remote workforce — and the tech and managerial challenges that came with that change — to finding ways to assist customers during a period of heavy social distancing, recent weeks have been a logistical nightmare for lending institutions.
Overnight, lenders were suddenly processing millions of SBA loans. For round two (and possibly beyond), many lenders are struggling with the processes that enable businesses to secure SBA loans. In a way, this surge has exposed some gaps in lending processes. Manual touchpoints and redundant frameworks are barriers that prevent rapid throughput and remote execution.
Fortunately, there's a way to ramp up your SBA processing strategy. But it requires investing in new solutions and rethinking traditional processes.
The Curse of Paper Applications
To say that paper-based applications are time saps is an understatement. The current lending landscape is fractured.
Despite 86% of lending institutions admitting that digital transformation "fundamentally changes the competitive and economic landscape of banking," the vast majority of institutions still haven't fully embraced this transformation. Even in the AP department, where time is a crucial component of securing "early-bird" discounts, over 80% of invoices are still paper-based.
For applications, the same problem persists—they're submitted on paper. Despite rallying calls from the U.S. Securities and Exchange Commission (SEC) — which has been busy implementing rules to facilitate digital transformation — lenders are overloaded with paper-based applications.
And that's the major issue. Lending institutions want to evolve. But archaic paper-based frameworks are still commonplace for many consumers. Lenders have to offer paper applications, but processing those applications eats significant time and resources — which results in molasses processes for almost every involved party.
Paper Isn't Going Away
Embracing digital transformation doesn't require the elimination of paper. Chances are, paper is going to continue to be a significant component of lending institutions for at least the next decade. Many consumers still rely on paper.
You need paper. But dealing with an unprecedented number of paper applications during this PPP period makes paper your biggest efficiency nightmare. So, instead of trying to find ways to urge consumers to apply digitally, lending institutions should be looking for ways to digitize paper-based applications to improve throughput.
If you can transform paper-based applications into digital documents, you unlock the ability to rapidly search, approve, organize, and categorize applications. You also create compliance-ready audit trails and maximize the value of your entire financial tech stack.
To help combat this never-ending stream of applications, lenders need to rely on digitization — not completely upend traditional processes overnight.
Digital Scanning and Digital Workflows Baked in Intelligent Data Capture
As lending institutions struggle through the PPP, implementing the right digital scanning and workflow technology is crucial. Your institution needs a way to instantly digitize paper documents — giving you the freedom to leverage digital workflows. Solutions like DRS Imaging's Optical Character Recognition (OCR) AI instantly recognizes handwriting and transforms paper applications into rich digital documents.
The use cases for digitization are many. According to studies, employees spend around 20% of their day searching for the right documents. When PPP loans flood in, navigating this torrent of paper-based data is next to impossible.
At the same time, digitization offers the ability to quickly approve loans via solutions in your tech stack, which reduces paper-based errors. The average benchmark for manual error rates hovers around 1%. Automation via digitization helps you eliminate those terrifying million-dollar delete buttons.
In the current SBA loan environment, speed is key. You're trying to give as many clients as possible access to the critical support they need. And, given that 50% of businesses admit they won't survive the next month or two without government assistance, failing to secure loans could lose your lending institution trust, business, and brand reputation.
DRS Can Help
DRS partners with leaders like Kodak and Canon, creating the competitive technological edge we need to transform paper documents, microfilm, microfiche, and aperture cards into digital documents. Our Intelligent Character Recognition (ICR), Optical Character Recognition, (OCR), and Optical Mark Recognition (OMR) facilitates digitizing virtually any type of document.
DRS solutions integrate with your existing ECM and other systems to help you expedite loans and secure those critical PPP funds. In our current economic environment, hours feel like months. Lenders are rushing to secure PPP loans before their competitors, and virtually every small business in the United States is desperately trying to secure stimulus solutions to keep their wheels spinning during this pandemic.
With DRS, you can help your clients access funds faster and with fewer headaches than your competitors. Don't let broken manual processes and paper-based workflows slow your PPP acquisition goals down. Contact us to learn how DRS helps you keep your clients satisfied, relieved, and funded.
SBA funds won't be around forever. As archaic as it seems, we're all operating on a first-come-first-service basis. DRS can help you (and your precious customers) be first.