Experienced commercial lenders, who are well-versed in the concept of Table Funding— a process in which lenders provide funds directly at the closing table, thus bypassing reliance on warehouse lines of credit or investor funds — are now actively embracing Table Funding. This strategic lending approach is gaining momentum due to its numerous advantages, especially the increased control it offers for investors to plug into the advantages of the in-house underwriting and closing processes of expert loan originators.
In response to the ongoing transformative changes in the commercial lending landscape, we will delve into several key advantages that make expanding table funding operations a compelling choice for private lending companies operating in today’s dynamic Commercial Real Estate (CRE) market.
It is important to recognize that alongside the increased control gained during the closing process, automating these procedures can take these benefits to an even greater level for lenders. We will also highlight the transformative power of automating the documentation and closing process, shedding light on how this advancement can further enhance efficiency, accuracy, and overall lending capabilities.
Key Advantages
Now, let’s explore the key advantages that make table funding and automated closing processes a winning combination for commercial lenders in the ever-evolving CRE market.
Faster Loan Processing: Table Funding allows lenders to streamline the loan origination process. By providing funds at the closing table, they can expedite the approval and closing process by partnering with loan originators who can underwrite and close loans that investors are committed to purchasing. This arrangement allows skilled loan originators to capture a greater market share, which is crucial in competitive real estate markets.
Automated loan document technology plays a pivotal role in expediting the loan origination and closing process. It guarantees the accurate and swift generation of documents, eliminating delays tied to manual preparation and review. Additionally, it provides investors with the assurance that the loan documents for the subject loans will fully comply with the investor’s specified loan requirements. This not only accelerates revenue accrual for the lender but also speeds up the overall lending process, benefiting both lender and borrower.
Enhanced Control: Private lenders can exert greater control over the loan origination and approval process by table funding loans, enabling them to quickly invest their capital in well-established, stable real estate markets without incurring the overhead associated with originating such loans. This control and quality control allows private investors to customize their particular lending criteria and adapt quickly to changing market conditions.
With loan document automation, these controls are built-in and effortless, allowing for quick adjustments and market pivots, as is needed in this dynamic market. Gone are the days of lengthy back-and-forth exchanges with attorneys, avoiding any delays related to legal resource availability, and significant reductions in attorney costs. This streamlined approach empowers lenders to stay in control while quickly adapting to continually changing market conditions.
Competitive Advantage: Expanding Table Funding operations can be a competitive advantage in the CRE lending space by increasing the reach and breadth of skilled loan originators. Private lenders that can close loans quickly and offer tailored solutions will attract more borrowers.
In the current landscape, automating the table funding process is undeniably the key to gaining a competitive advantage. Lenders are actively seeking automation to meet ever-increasing demands for market efficiency and accuracy. It is the linchpin that enables loan originators to not only meet but exceed, borrower expectations while staying ahead in the competitive CRE lending space.
Improved Profit Margins: By funding loans directly, loan originators and investors will reduce costs associated with third-party services and warehouse lines of credit. This can lead to improved profit margins.
In line with the competitive advantage mentioned above, improved profit margins are made possible through automation. Automation ensures continually compliant and comprehensive lender-friendly documentation, revenue accrual acceleration, swift loan closure, elimination of attorney fees, efficient resource allocation, and overall cost efficiencies. These collective benefits indisputably enhance lenders’ profit margins significantly, all day long.
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Next-Generation Loan Document Automation in Private Lending
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Risk Management: Private lenders can have better oversight and control over the quality of the loans they originate by employing a trusted and experienced automated loan documentation system. This can help mitigate risks and maintain loan quality, especially in a volatile market.
When using the GoDocs loan automation platform, risk is effectively eliminated as the software ensures constant compliance with federal and state laws, as well as with local closing requirements. This top-tier automated solution upholds the highest standard of compliance, employing “reasonable care and diligence” to guarantee unparalleled compliance processes and guarantees. You will not find a better level of automated risk mitigation and compliance assurance in the industry.
Flexibility: Table funding provides flexibility in terms of loan products and terms. Private lenders can tailor their offerings to meet the specific needs of their borrowers and the demands of the CRE market.
GoDocs’ loan document automation technology is designed by lawyers and developers to ensure the flexibility needed by lenders. Commercial lenders have adopted our software for table funding in states where table funding is allowed (wet states) and can attest to its proven flexibility and success. This flexibility includes crucial features like including key documents in the loan package, such as the Allonge to the Note, Assignment of Mortgage/DOT, Assignment of Loan Documents, and all other assignee protections within the original loan documents, all at your fingertips for streamlined Table Funding.
Reduced Dependency: By relying less on warehouse lines of credit, originating lenders can reduce their dependence on external funding sources. This can be beneficial in uncertain economic conditions where credit availability might fluctuate.
Assessing Market Dynamics
It is important to note that the decision to get into Table Funding or expand these operations depends on a lender’s business strategy, risk tolerance, available capital, loan origination requirements, and market conditions. Private lenders often assess the market dynamics and their own capabilities before making such a move, and these decisions are influenced by their long-term growth and profitability goals.
Embracing Advancements: The Path to Thriving
In today’s fast-paced and competitive CRE lending landscape, the synergy of Table Funding and automation is no longer a ‘nice to have,” but has become a business necessity. It is the key to achieving a competitive edge, unparalleled flexibility, and superior efficiency. Private lenders now are realizing that the power of Table Funding, combined with cutting-edge automation, is not just a strategic choice; it is the path to thriving in the dynamic and, sometimes, volatile, world of commercial lending.
By embracing these advancements, lenders are not only streamlining their operations but also enhancing their profitability and responsiveness. As the landscape continues to evolve, those who harness the transformative potential of table funding and automation will be the ones leading the way, setting new industry standards, and driving success in the ever-evolving CRE market.
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Gaining a Competitive Edge with GoDocs
To maintain or gain the competitive edge and strive to be #1 in the lending industry, private lenders must continually adapt and evolve. Embracing next-generation technologies and solutions becomes imperative, and that includes harnessing the power of the loan document automation ecosystem offered by GoDocs. By leveraging GoDocs’ cutting-edge automation tools, private lenders can streamline their loan document processes, improve efficiency, reduce errors, reduce resources, and enhance operations to handle any loan type, any loan size, and any loan volume while mitigating risk automatically.
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