5 Reasons Why Every Construction Lender Should Use Construction Payment Software
Construction payment software is changing the game of construction lending. Pen-to-paper methods of managing loans are outdated and inefficient.
Double payments. Risks and mistakes. An overwhelming number of spreadsheets inundated with complex formulas and manual entries. All too often, this is the life of construction loan management.
But it doesn’t have to be.
In today’s world, using construction payment software is an absolute must for lenders. Here’s why:
1. Lowering Risk
Spreadsheet tracking is a risky business. Often, information gets lost or is input incorrectly. Multiple editors on the same file can lead to double payments or over-disbursement of funds. 90% of spreadsheets used in the workforce contain significant errors [ZDNet].
Adopting a payment software removes these risks by automating draw processes and keeping loan remains in balance.
2. Saving Time
With this type of software, data collection is automated. Once the project data and information is uploaded, the software handles the rest. This makes it faster and easier to track loans and spot potential problems.
When loan administrators spend less time collecting data, they have more time to tackle other projects.
3. Speeding up the Draw Process
Contractors and subcontractors have gotten used to being paid late. It took an average of 83 days for subcontractors to get paid for completed work in 2018 [Pricewaterhouse Coopers]. 83 days! Delayed payments are often the result of excessive paperwork and unreliable loan tracking spreadsheets on the part of the lender.
Payment software makes the draw process significantly faster and easier. It allows contractors to receive their money on time and pay their subcontractors with no delays. 83 days is a thing of the past.
4. Managing More Loan Volume
Automated processes in construction management software can allow you to manage exponentially more loan volume without the need to bring in new hires.
With manual spreadsheets, loan administrators reach max capacity quickly. An experienced loan manager might be able to handle as many as 50 loans at once. With construction payment software, that same loan administrator should be able to manage three times that amount.
Without payment software, you’d need to hire an additional two employees to manage that many loans.
5. Building Relationships
When loan administrators spend less time combing through data and dealing with spreadsheets, they have more time to develop positive working relationships with builders. When builders are happy and have good relationships with lenders, they’ll keep coming back.
If you’re not capitalizing on the upsides of modern payment software, builders will find a lender that does.
CoFi Will Help You Become a Better Construction Lender
CoFi’s construction payment software solves all the challenges of construction lending. It allows construction lenders to build a relationship with all parties involved in a project by providing a technology platform for communication and a solution to the pains of draw management.
Stay ahead of the competition. Learn more about how CoFi’s construction management software can help your company and schedule a personalized demo today!