How Cash Flow Predictive Data Can Streamline Your Loan Origination Process

1. How Cash Flow Predictive Data Can Streamline Your Loan Underwriting Process Cash flow predictive data has numerous benefits, although collecting, storing, and managing high volume, velocity, and veracity of information can be daunting. However state-of-the art technologies enable financial institutions to get the best from cash flow predictive data.

2. Cash Flow Predictive Data Transforms the Lending Industry Typically, underwriting inaccuracy occurs when underwrites use inaccurate, incomplete, and outdated data. In the past, lenders relied almost exclusively on information they collected through a borrower’s financial documents. They evaluated a borrower’s credit score, business history, annual revenue, and collateral to determine creditworthiness and calculate interest rates, loan amount, and repayment terms.

3. However, this historical data was often not sufficient to make the right lending decisions. Financial institutions also needed some forward-looking data points such as cash flow, income, expenses, behavior, activity to assess the ability of the borrower to repay the loan and choose the deserving borrower. Now, lenders can access multiple financial resources for a range of borrower information such as banking, accounting, cash flow, and other financial data sources to get real-time insights and streamline the underwriting process. The Role of Technologies in Cash Flow Predictive Data

4. These days, some ground-breaking financial technology companies use predictive analytics and modeling techniques to forecast and manage cash flow. Also, they leverage advanced analytics and AI and ML-based systems to collect, predict, analyze and transport the most robust and real-time cash flow predictive data to lenders. These firms provide financial data APIs that help lenders to convert raw data into meaningful, easy-to-understand, and actionable insights to accelerate underwriting decisions. Since cash flow predictive data allows lenders to accurately predict the financial future of a business, they will be able to better determine if the business has the ability to repay existing debt obligations and purchase new loans.

5. Quicker Underwriting As more technologically advanced systems collaborate, the lenders gain a supply of consistent real-time data to speed and scale up the loan underwriting process. Codat, Validis, and ForwardAI are some FinTechs, use machine learning and artificial intelligence algorithms to collect, standardize and normalize past, present, and future cash flow data of a borrower. From a risk management perspective, lenders can see deep critical insights into a borrower's financial health and identify if the business can generate enough cash flow in the future to repay the loan amount. It will help lenders to enhance their

6. underwriting processes, reducing loss and providing a better customer experience. Benefits of Cash Flow Predictive Data for Loan Underwriting With cash flow predictive data, lenders can streamline their loan application processes and create personalized services because they thoroughly understand each borrower’s risk profile. When cash flow predictive data is used with historical data points, it can help lenders: ● Significantly reduce application processing time ● Reduce human errors in the underwriting process ● Enable continuous underwriting and accurate risk assessment ● Determine creditworthiness ● Reduce credit bias and make loans fairer ● Improve customer experience ● Providing customized loans and products ● Identify and meet customers’ demands and needs ● Attract new and train existing customers

7. If you want to gain a competitive advantage, close more loans and generate more sales and revenue, you have to speed up your loan underwriting process. The perfect blend of technology and real-time cash flow data will help you streamline the whole underwriting process and provide fast and easy loans. https://lendingfront.com/blog/industry/underwriting-the-new-underwriting-technol ogy-evaluating-innovations-in-data-use-and-credit-decisioning/ https://finreglab.org/wp-content/uploads/2020/03/FinRegLab_Cash-Flow-Data-in-Un derwriting-Credit_Market-Context-Policy-Analysis.pdf https://financingconsultants.wordpress.com/2021/06/21/how-cash-flow-predictive-d ata-can-streamline-your-loan-underwriting-process