Economic development corporations are location-specific organizations that exist to attract businesses to their regions. Typically structured as 501(c)(3) non-profits, and often allied with local chambers of commerce, EDCs are under pressure to respond helpfully to the coronavirus pandemic on behalf of regional businesses. Fortunately, innovations in lending technology make this easier to achieve.
Even in the best of times, EDCs can help achieve or maintain long-term economic growth for the communities by facilitating access to fair credit with a modular lending platform that is thorough, fast, and easy to use. TurnKey Lender has a special edition of its Unified Lending Management solution tailored to the needs of EDCs and other organizations that partner with governments to support small businesses.
As a pioneer in the lending-technology space, TurnKey Lender has long provided creditors with an end-to-end solution that automates every step of the lending process. Now it plays a similar role for lenders operating under the Paycheck Protection Program, or PPP. That’s part of a $2.4 trillion stimulus package the US government has earmarked for individuals and organizations hurt by Covid-19 and the social-distancing measures taken to slow its spread.
The PPP, which is run by the US Small Business Administration, offers small businesses and nonprofits low-interest loans to cover up to two months of payroll and other employment-related expenses.
If you’ve seen one EDC, you’ve seen one EDC
So far, the extent to which EDCs and related organizations seem willing to work within government programs to fund local businesses harmed by the coronavirus lockdown has varied, reflecting different mandates and interpretations.
- In New England, one EDC takes part as an “intermediary lender” to businesses in 76 communities under the PPP, and as a micro-lender to local small businesses in a pre-pandemic SBA program.
- A small business lender to businesses in and around Philadelphia, says it’s working on “new loan programs” with a New Jersey EDC, but specifies that it isn’t and won’t be a PPP lender.
- Similarly, in Indiana, an EDC acts as a local conduit for a forgivable small-business loan program sponsored by the Indiana Office of Community and Rural Affairs — but it doesn’t participate as a lender through the PPP.
- In New Jersey, an EDC with a focus on lending emphasizes it’s not a PPP lender and doesn’t plan to become one — even though the SBA has them listed on its own website as participants.
Many other EDCs restrict themselves to offering hyperlinked information on the PPP and other SBA programs that provide stop-gap funding for businesses struggling in the lockdown.
No matter how an EDC chooses to help businesses, whether in “normal” times or in the throes of a public-health crisis, their ability to provide funding, directly or not, is fundamental to their mission. Thanks to advances in technology — especially around artificial intelligence and digital applications — EDCs can affordably offer credit using end-to-end lending automation tailored to their specific needs.
Make way for lending optimization
“In today’s digital economy, the key to continued economic development lies in efficient work with local industries and communities,” says Dmitry Voronenko, CEO and co-founder of TurnKey Lender, a lending-tech provider whose clients provide credit to small businesses around the world. “Applied to lending, this means EDCs have to go fully digital and offer their borrowers an automated, user-friendly process with intelligent workflows and credit decisioning.”
To arrive at fast and accurate credit decisions, TurnKey Lender applies traditional and alternative borrower-evaluation and risk-assessment approaches to score each applicant and make an AI-powered credit decision within minutes rather than days. For lenders whose client base has undergone diminished credit standing in the pandemic, alternative scoring — based on borrower-permitted overviews of the applicant’s financial records, psychometrics, or measures utterly unique to the situation — can impart a broader sense of a borrower’s creditworthiness.
In this way, TurnKey Lender applies proprietary machine-learning algorithms and deep neural networks to help evaluate loan applicants.
Underlying scorecards and decision rules are built into the TurnKey Lender platform, and these can be adjusted to meet the particular needs of a given EDC. Configurability also comes to the fore in the form of modules made to automate specific parts of the crediting and collection workflows. As a result, EDCs can save money by using the parts of the platform they get the most use from while enjoying all the benefits of an intuitive white-label interface that preserves their branding.
Unified Lending Management at a glance
TurnKey Lender’s end-to-end lending automation for EDCs includes:
- Online loan application
- Full-spectrum adjustable credit decisioning
- Automatic loan origination
- Underwriting and disbursement
- Full loan management automation
- Loan collection
- Collateral management
- Reporting (a flexible module that allows for custom report)
- Archiving and activity tracking
The platform, which can be up and running within 24 hours, can also be pre-configured specifically for PPP lenders.
“The coronavirus pandemic has forced lenders to think about the power of technology to limit person-to-person contact,” says TurnKey Lender’s Voronenko. “But technology, especially lending technology, is proving equally important in our efforts to support businesses in, and well after, the pandemic’s worst days.”
Read more and let us know what you think.
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