Kristian Dolan,
Founder & CEO,
Northteq

Strong relationships between equipment finance lenders and vendor partners are essential for business growth. However, the lender’s digital offering often becomes the deciding factor in these relationships. A digital experience that removes friction and enables more equipment sales is key to maximizing these vital connections.

Lenders need digital capabilities. Partnering with companies that offer automated loan origination solutions significantly improves the user experience for both lenders and vendors. Automation provides quicker connections between lenders, vendors and borrowers through features not found in traditional digital experiences, such as:

• Frictionless app entry
• Real-time visibility, including necessary disclosures
• User-friendly interface that requires limited or no training
• Decisions that are made in minutes — not hours or days
• Self-service documentation for any open items, such as credit contingencies

Providing automated fraud solutions protects both the vendor and lender from significant losses. AI-powered tools analyze transaction data in real time to detect and monitor fraudulent activities, enhancing security for the vendor, lender and borrowers.

Through automation, vendors gain real-time access to status updates, credit decisions and documents without any additional effort from the lender. Most importantly, a streamlined experience directly accelerates the borrower’s transaction process, helping create faster decision and funding so that more equipment is sold by the vendor.

BUILDING STRONG VENDOR RELATIONSHIPS

To build a strong vendor relationship, lenders must make it as easy as possible for vendors to bring them business. By building a frictionless experience, vendors are empowered to sell more equipment, which enhances the lending process for borrowers and solidifies invaluable vendor-lender relationships.

McKinsey reports that digital intake systems can reduce processing times by 50%, ¹which creates sticky relationships between the vendor and lender. Automated intake systems streamline document submission processes, minimizing manual processing times and paperwork. This results in faster approvals and improved borrower satisfaction.

COMMON ISSUES IN CREATING A DIGITAL EXPERIENCE

A few common issues in creating a digital experience include:

• Hard to use: The digital experience should be as easy as any retail ecommerce site. A poorly-designed user interface and lack of clear navigation leads to frustration.

• Training requirement: Vendors are busy and don’t have time to learn a new system.

• Lack of transparency: Vendor and borrower confusion over status and next steps results in funding delays.

• Workload increase: Vendors are partners with lenders; that does not mean they should do all the work.

Manual data entry and tedious tasks push vendors to choose lenders with simpler application processes.

These issues disrupt the automated workflows that digital engagements are meant to provide, signifying a poor user experience that delays deals from getting funded quickly.

LEVERAGING AUTOMATION TECHNOLOGY FOR VENDOR SUCCESS

According to American Banker, the top three potential benefits of automation are:
• 55% cost reduction (including personnel costs)
• 51% better borrower experience
• 51% improved workforce operation and employee efficiencies ²

When portals offer an improved and more visible user experience, lenders consider the technology to be an advantage. Automated workflows enable sales teams to reduce time-consuming administrative tasks and eliminate tedious data entry to close deals faster. This helps sales reps spend more time with borrowers to understand their business and provide more personalized solutions.

OVERCOMING MANUAL PROCESSES AND TOUCHPOINTS

Standard portals rely heavily on manual interactions, resulting in inefficiencies, errors and funding delays. If lenders manually generate lease and loan documents, it can greatly increase the time and degrade the user experience.
Entering data by hand increases the number of touchpoints lenders and vendors have, while also slowing down the process. Many portals don’t support a truly touchless automated experience that moves loan origination along in a cohesive, simplified way.

Manual interactions with these portals frequently lead to frustrated borrowers, user error and more work for all parties involved. On the other hand, fintech tools that support automation for portals and offer fewer touchpoints
provide a user-friendly environment protected against human error and setbacks.

ENHANCING VISIBILITY FOR IMPROVED VENDOR RELATIONS

Effective communication is essential throughout the lending process. However, it often results in limited visibility for vendors and lenders, making it difficult for them to track each other’s progress. This lack of real-time transparency can lead to misunderstandings and delays in transactions, milestones and interactions. Maintaining strong communication and relationships becomes crucial as status updates heavily rely on them. Unfortunately, without an automated system to keep vendors and lenders informed, one party may be left in a state of uncertainty.

Adding visibility means that the back-and-forth method of manual communication for every small detail of a transaction is no longer necessary. Similarly, the flexibility to communicate how you see fit, be it SMS or automated emails, allows for a more streamlined relationship. Each person working in the portal has 24/7 access to the progress made, where the deal stands and where the transaction is going. Portals integrated with fintech automation tools can enable users to receive notifications about updates, statuses, upcoming deadlines and recent activity related to the transaction.

Organizations adopting integrated systems can increase operational efficiency. Cloudbased platforms and integrated systems enhance transparency and data sharing across partners and lenders. Real-time insights and automated reporting systems identify discrepancies, fostering trust and minimizing unethical practices. Platforms like AWS, Azure and Salesforce streamline customer interactions and data management, reducing errors and paving the way for future technological integrations.

Transparency builds trust and reliability in lender and vendor operations, giving peace of mind to borrowers and vendors. On top of it all, visibility improves the customer experience by ensuring everyone involved in the lending process is well-informed about the deal and can track its progression and modifications throughout the process.

FUTURE OF EQUIPMENT FINANCE: THE VENDOR’S DIGITAL EXPERIENCE

In order to grow in the equipment finance lending space, focusing on the vendor’s experience is vital. A portal that is intuitive, customizable and transparent doesn’t just benefit lenders — it becomes a powerful tool for vendors, motivating them to channel more business in the lender’s direction. By placing emphasis on the user experience for both borrowers and vendors, the groundwork is laid for strong, lasting relationships and efficient operations.

Developing a seamless lending process is not just a necessity; it is the foundation for fostering strong borrower and vendor relationships and ensuring efficient loan operations. By prioritizing user experience, lenders unlock the potential for smoother transactions, enhanced customization, transparent operations and increased operational efficiency. •

¹ Gregolinska, Ewelina, et. al., “Capturing the true value of Industry 4.0,” McKinsey & Company, April 13, 2022.
² Sanneh, Ebrima, “Taking automation one point at a time,” American Banker, 2023.

Kristian Dolan is the founder and CEO of Northteq.