American Banker: Can Technology Make Construction Loans Less Risky?

By December 2, 2016Article

As featured in American Banker.

Lending to developers and builders is community bankers’ bailiwick … and sometimes their bane.

In good times construction lending keeps community banks thriving, but the financial crisis of 2008 brought down hundreds of small banks because they were heavily exposed to commercial real estate.

Perhaps there is a tech solution to avoid or soften the bad times, some fintech vendors say. Granted, no software can prevent real estate downturns, but construction lenders’ reliance on spreadsheets, file folders and sticky notes is said to add hazards. Their platforms, the vendors say, can streamline the process and make it safer.

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