A new AI-powered lending platform has been launched that could help brokers expand “more easily” into commercial lending and “maintain their incomes” in the aftermath of the royal commission.
Global Capital Commercial has announced the launch of a new lending platform designed to “streamline” the enquiry-to-settlement process for its 6,500-strong broker network.
The artificial intelligence-powered platform, called Lenflo, offers access to more than 450 funding sources – including investment banks, private lenders, high net-worth investors, banks, and non-banks – with the capacity to manage $1 billion in settlements per month.
Speaking with The Adviser, Andrew West, national sales manager for property at Global Capital, explained that the platform “pre-selects” the most suitable loan products – whether it’s commercial property loans, construction finance, residential loans, business loans or equipment finance – based on the answers filled out in the initial enquiry form.
The whittled-down list of suitable products can then be reviewed by the broker and the client to then determine the one that is the most appropriate.
The broker can then submit the loan application on behalf of the client through a custom-branded online portal. A Loan Market broker, for example, would be using a portal that is customised with Loan Market’s branding, Mr West noted.
According to the national sales manager, Lenflo essentially diminishes the need for brokers or borrowers to undertake a cumbersome research process, particularly noting that commercial loans are significantly more complicated to arrange than residential loans.
“Commercial and private lenders typically do not have fixed pricing and instead offer risk-based guidelines on a deal-by-deal basis,” Global Capital’s announcement states.
“Lenflo’s pricing engine has delivered indicative funding proposals with over 97 per cent accuracy in lender approval rating during its year-long testing period.”
Based on internal testing over the last year, the lender expects commercial loan approvals to increase six-fold due to higher data quality at point of sale.
Global Capital, which was established in 2001 as a “broker-to-broker” business, also believes in the new platform’s ability to help brokers “maintain their incomes in 2020 and beyond” as they would be able to expand into commercial lending “more easily”.
Mr West noted that brokers have been reporting that their revenues had fallen by up to 50 per cent in the tightening residential market over the last year from peak 2017 levels, adding that further drops are expected as the banking royal commission’s recommendations come into effect.
As such, he said diversification is particularly important at a time when the existing broker model is under threat.
“Instead of painstakingly researching areas of business they are not familiar with, brokers are guided through the process required for a particular borrower category, from property developers, property purchase and loan refinancing, to self-employed borrowers, SMSFs, bridging finance and other business customers,” the lender’s announcement states.
The broker portal will also provide access to educational resources to help brokers understand the intricacies of commercial lending and train them on how to best structure commercial deals.
While Lenflo has not yet been rolled out across its entire accredited broker network, Mr West said the feedback from early adopters has been very positive.
The lender is looking to make Lenflo accessible to 50 to 100 new brokers every week, according to the national sales manager.
Mr West acknowledged that the decision to make the platform – which was initially built for internal use – available externally is part of its strategy to boost engagement in the broker channel, which already originates 50 per cent to 75 per cent of Global Capital loans.
The current plan is to keep the platform free for the first 12 months while Global Capital continues to make refinements.