We aren’t underwriters, but we imagine the process to look something like this:
1. The bank policy or SBA requires financial projections for certain business loan applications.
2. The business then submits a set of projections in one of a million different possible formats. Just look at all of the different templates you can find out there with a simple Google search offered by the following organizations:
3. Then the underwriter has to take the projections provided by the client and find the specific numbers needed to enter into spreading software. Let’s say that you need to enter 10 different numbers like:
- Cost of Goods Sold
- Operating Income
- Net Income
- Cash on Hand
- Accounts Receivable
- Fixed Assets
- Current Liabilities
- Long Term Liabilities
So you should probably be able to find all of these numbers somewhere on the client’s set of financial projections, but the problem is that the numbers could be anywhere, in any format, they could be called something different. There are so many different terms and ways to say the same thing with financial statements, so it could be really difficult and time consuming to transfer the numbers from the financial projections to the spreading software.
Then what happens when the projection template doesn’t quite have all of the numbers that you need to complete your analysis to satisfy SBA or the underwriting team? You have to write up an email to send back to the client explaining what you still need and then go back and forth with the client until the projections are complete.
4. Then after all of that, most client financial projections are completely unrealistic anyway.
It seems like such a terrible process.
A Potential Solution
So at ProjectionHub we think we might be able to help banks and underwriting teams make this process more efficient, but we need your feedback. Here is how we think it could work:
- We create a unique URL for your loan applicants to use to create a set of financial projections. For example, www.projectionhub.com/bankxyz
- Loan applicants create their financial projections with our simple web application.
- Then the final product is an Excel file that is formatted specifically for your bank.
- You simply tell us what numbers you need to enter into your spreading software and we create a custom tab on the Excel file that puts those exact numbers in the order that you need them to enter into spreading software.
This would solve several problems for the bank:
- It would standardize the financial projection process so that you can easily analyze the projections
- It would speed the process of data entry from projection to spreading software
- It would ensure that the client projections are always completed with the numbers that you actually need
- It would allow the underwriters to quickly analyze whether the projections are realistic or not because of the standard format
We want your feedback on this. Would this be helpful for a bank? Please leave us a comment below of send me an email at firstname.lastname@example.org
You can also test out ProjectionHub here.