The online lending movement to date has focused on consumers and small businesses looking for straightforward applications and quick approvals.
But Bremer Bank in St. Paul, Minn., Is set to announce Thursday morning that it has signed a contract to use Numerated Growth Technology’s online lending software to provide fast, automated loans to farmers.
Numerated is the technology spin-off of Eastern Bank which is led by Dan O’Malley, who was the head of Eastern Labs and digital director of the bank. He built the new farm lending software together with $ 12 billion in assets Bremer, the 11th largest agricultural lender in the country.
âWe see this as a gap in the market and believe that by working with Numerated we can provide this solution for small businesses to the farming community,â said Dan Flaningan, director of strategy at Bremer Bank. âAt the end of the day, that’s what a farmer or a person who runs a farming business is, a business owner. “
Customers of Bremer ag are generally small family businesses. Farmers who are in the fields during the day have little time to visit a bank branch.
âOur agricultural customers are the most digitally savvy,â said Flaningan. “They are more inclined to use the mobile deposit feature, as time is obviously important to them. Making a potentially large commitment to travel to town to a branch to deposit a check is not beneficial to them as as a business owner. â
The bank plans to test the new software in the fourth quarter and launch it next year.
Neither Flaningan nor O’Malley would discuss the details of the contract, how Numerated software has been revised to support farm loans, or the new types of data extracted to secure the loans.
“I think this is a testament to how quickly digital and online loans are spreading to be able to do so in such a conservative category as farm loans,” O’Malley said. “But basically the engine is the same.”
Next year, Numerated plans to add credit card issuance to its platform. The software is also used to make larger business loans, O’Malley said.
O’Malley says banks that simply apply for a loan online rarely increase their lending volume.
âWe’ve learned that in Eastern – if all you do is apply online, you won’t be making more loans,â he said. âYou have to transform the way your employees and your marketing talk about banking and selling loans if you want to make money and grow. “
Numerated provides training and technology to make selling loans a natural part of helping clients.
âMost bankers are service oriented,â O’Malley said. âWhen a customer calls him, he wants to help him. We empower bankers to have the tools to sell a business loan as part of the service experience.
Numerated software prequalifies all leads from a bank’s footprint. When a local businessman calls, a banker can tell him that he qualifies for some type of loan and what the terms would be.
âThe banker is not required to take credit training to accept the request; they may not be credit trained and still be able to sell loans because the system is doing the credit work for them, âO’Malley said. The software makes loan decisions in about 45 seconds, he said.