Sageworks Offers Lenders A Door To SMEs

Financial information firm Sageworks has announced its expansion into the world of SME lending.

Reports said Monday (Nov. 14) that the company is entering the small business finance space with a new platform that adds to its existing consumer lending, credit risk and portfolio risk management offerings for financial institutions.

Sageworks’ new SME lending platform offers an end-to-end experience, including loan application, data aggregation, stress testing and other features for institutions that want to begin lending to small businesses. According to the company, institutions are looking at small business lending as a way to grow, but they need to be wary of the fact that they are often less profitable than lending to larger corporations.

That fact, Sageworks said in its announcement, means these institutions need to be particularly focused on the loan origination process.

Sageworks’ platform allows institutions to offer an online loan application, while lenders can streamline the application assessment process by automated tools, like the firm’s technology that identifies key information in borrower tax returns. The platform customizes loan application decision making, the firm added, links institutions to credit reports and uses Sageworks’ existing probability-of-default model.

Offering assistance with borrower data aggregation and management may be a critical part of helping large lenders expand their SME financing businesses.

PYMNTS recently spoke with Baker Hill, which emphasized the challenge of Big Data that some of the largest lenders continue to struggle with.

“Banks struggle with the connection of loan origination data to loan portfolio management data and insights,” stated Baker Hill Senior Director of Solutions Management Mike Horrocks. “Closing the gap of what insights were utilized in extending credit to what insights are used to continue the utilization of credit is critical for financial institutions today.”