Can you share your background and how you ended up at Finley?
My name is Wingate White, and I work on the Capital Markets team at Finley, focusing on helping customers implement our software platform. Before joining Finley, I spent about six years at Deutsche Bank, where I held various roles related to trade processing, relationship management, and risk management.
I switched to a new role in the Workout and Recovery Management team, which is a part of the credit risk department that deals with loans that have problems. I found this area interesting because each troubled loan had its own unique story. While most loans were fine and payments came in on time, a small number ran into issues, and that's where I learned a lot.
But, I ran into the same old issue again: doing reviews every year or every quarter was a huge hassle because we had to do everything manually with spreadsheets. It took up so much time just to make the same reports by hand over and over.
That's when I decided it was time for something new and joined Finley.
What does your role in customer implementation involve?
My role involves guiding customers through the implementation process, from initial discussions about what to expect and data preparation to hands-on work with raw data.
It's pretty interesting because every setup brings its own surprises, especially when we first review their data. For example, some customers might track their money in pennies instead of using decimals, which means we have to adjust the numbers to make sense in dollars. It just adds unique quirks to their data.
Once we understand the customer's raw data and look at their credit agreement (which they themselves might not be fully familiar with), we help them understand the terms they've agreed to. Many of our customers are dealing with a credit facility for the first time and might not fully grasp what they've signed up for according to the paperwork. So, we guide them through the calculations in our platform, working together and giving lots of feedback.
Our goal is to get to the end of the setup process smoothly so we can hand over control to the customer and say, "You're all set up. You can now manage your credit facility easily through our web app instead of sifting through legal documents."
We’re successful when we can empower customers to manage their credit facilities efficiently through our software, streamlining their operations and enabling them to focus on their core business. Each setup is unique, but it's always rewarding to see customers light up when they realize how the software simplifies managing their finances.
Were there any surprises in your transition from banking to a fintech startup?
The biggest surprise was realizing the monumental nature of credit facilities for borrowers and the knowledge gap that exists for those not frequently dealing with them. Bridging this gap has been both surprising and fulfilling.
What are some common challenges borrowers face during the lending process?
Borrowers often struggle with the operational side of accessing their funds. Unlike consumer credit, business facilities require comprehensive reporting and compliance with the terms of the deal, which can be time-consuming and complex.
One of the main challenges is making sure you're following all the rules of your agreement with the lender and managing to do it efficiently. Nobody wants to hire someone just to spend all their time managing a line of credit. Ideally, accessing and using your credit should be as smooth and straightforward as possible.
Another challenge borrowers face is ensuring the eligibility criteria negotiated with lenders match the reality of their data.
For example, one customer thought a 7-day grace period for late payments was enough. But they soon realized a lot of their customers consistently paid 8 or 9 days late every month, like clockwork. The reasons for these delays varied, but the pattern was clear and happened regularly.
So, the borrower had to approach the lender to discuss and adjust the agreement to better suit their reality, like extending the grace period to accommodate these "sloppy payers," as they're known in the industry.
With Finley, accessing and presenting their data effectively allows borrowers to work with lenders on making necessary adjustments, turning it into a powerful approach for managing their credit facilities more effectively.
What are some common challenges lenders face during the lending process?
Lenders often understand the underlying business models of the businesses they're lending to. They’ll find similar companies to make up their portfolio and might lend to several of them. But each has its own way of recording and describing financial data. This variation means lenders have to figure out how to standardize or "normalize" this information so they can compare it effectively across different companies.
The challenge for lenders is in trying to spot any inconsistencies or issues, like if one company is underperforming compared to others. They're looking for a method to simplify and align this data analysis process, making it easier to compare "apples to apples." The main struggle is handling and interpreting the vast amount of diverse data they collect from these companies to draw meaningful conclusions. This difficulty in managing and making sense of the data is a significant issue for lenders.
How can automation speed up the lending process?
For borrowers, the process of getting their loan approved and receiving their funds has really sped up. Lenders have a list of things they check off to make sure everything's in order before they approve a loan. When you send in your paperwork, you want to make sure there are no mistakes at all. Even a small error, like writing the wrong date, means someone has to review it, send it back to you, and then you have to fix it and send it back again. These small details are important for lenders to keep their records straight.
But if you get everything right the first time, it speeds up the approval process a lot. That means borrowers can get their money quicker and more smoothly, especially when they use automated systems that help avoid these mistakes.
For lenders, dealing with the paperwork is a bit like the flip side of the coin. When they get documents from borrowers, they have to go through everything carefully, make sure all the information is correct, and then give the green light. If there are mistakes, a lot of time can be lost on back-and-forth communication, pointing out errors, and waiting for corrected forms.
Lenders can speed up their approval process by implementing automation and cutting down on these errors. They don't have to get bogged down in the details of every application. Imagine reducing a task that usually takes 10 minutes to just 30 seconds or a minute because everything's already correct. That's a game-changer, allowing lenders to work through their daily tasks much more quickly and efficiently.
How can technology improve communication and transparency between lenders and borrowers?
The credit agreement is essentially the contract that both the lender and borrower sign off on, starting off on the same page with the same document. However, it's fascinating how, after signing, both parties manage the agreement in their own ways. The lender might use specific software or spreadsheets to keep track of the loan's details, while the borrower might have their own method of recording everything.
As transactions happen, like drawing funds or making payments, both parties update their records independently. This can sometimes lead to discrepancies; for instance, if there's a mistake, the records won't match, leading to confusion over where things went wrong. It could be as simple as disagreeing on the date when funds were drawn, which complicates things when it's time to calculate interest.
Having a common system that both the lender and borrower use can simplify operations, eliminating the guesswork and backtracking to pinpoint errors. This shared platform ensures everyone is on the same page throughout the life of the loan, making the whole process smoother and more efficient for both parties.
What impact can technology like Finley have on lenders' decision-making processes?
The biggest advantage for lenders when it comes to deciding on issuing new loans really comes down to the data they have about the borrower. For instance, when someone applies for a car loan, the lender uses the applicant's credit score to judge how likely they are to repay the loan, which influences the loan's terms and interest rate. But imagine if lenders had access to even more detailed data.
Instead of just a credit score, lenders could look at the entire history of a borrower's previous credit dealings, including detailed performance on past loans and a deep dive into their financial activities. Take, for example, a business that issues credit cards. If a lender has detailed data on how that business managed its finances across several credit facilities, it gets a clearer picture of its financial health and behavior.
This comprehensive data allows lenders to make quicker decisions, potentially offer better terms, and assess risks more accurately. This means they could be more competitive in the market, especially if they have a solid history of data on similar borrowers to reference. It's all about having a more complete picture, which can lead to better outcomes for both lenders and borrowers.
Do you have any advice for borrowers during the application review process?
Borrowers should proactively present their data and run through calculations before finalizing a deal to ensure expectations align with reality. This preparation can prevent surprises and streamline the negotiation and implementation process.
Any final thoughts on how lenders and borrowers can leverage tech for a better experience?
The biggest thing you can do is define the ultimate goal or the "ideal state" for your operations and then identify the steps necessary to get there. There are so many facets of the industry, from tracking deliverables and handling daily funding operations to conducting regular risk assessments of loan facilities, and tech can help with any and all of those.
It's unlikely you’ll find a single solution that addresses every possible need or desire of a lender right away. Prioritize what matters most and just take that first step. Getting a product in place that can grow with you is the first step for a digital transformation strategy.
Want to learn more about Finley?
Finley is private credit management software that helps private credit borrowers and asset managers streamline and monitor asset-backed loans. From tracking covenants and deliverables, to assembling funding requests and analyzing asset performance, Finley gives borrowers and lenders peace of mind when it comes to debt capital management. For more, check out our Product page.
Interested in learning more about what it’s like to work at Finley? Check out our careers page.