Decode the Language of a Borrower Entity. Analyze Financial Statements with Perfios

28th October 2021

In the highly competitive lending market, appraising the creditworthiness of borrower entities with accuracy in short periods is an absolute desideratum for success. Lending is a risk-based business, to reduce risk is essential, increasing accuracy imperative and speed is a necessity.

Why Decoding is the Crux?

The borrower’s profile forms the basis of decision making for credit approvals which includes the accounting and financials of the borrower entity. It is vital within the lending industry to understand the borrower’s language of accounting and finance and how the financial statements all fit in together. 

As a lender, you need complete insight into borrower entities to know their condition of solvency, liquidity, and survival in the long run. The underwriter needs to assess the borrower’s ability to generate cash, pay for interest, and profitability in order to repay the principal amount. The decoding of financial statement analysis discloses crucial facts about the business performance of the borrower. It enables you to make predictions about the borrower's financial situation, and is critical to decoding borrower language to make decisions regarding the loan approval.

Most companies don’t have a standard format of financial statements, each varying greatly from the other. Different borrower companies account for finances differently, which poses a challenge when your  underwriters have to analyze financial statements. They need to decipher the borrower’s business format and language before deciding on the loan, i.e., understand, research, and infer its financial health. By accelerating the decoding process for financial statement analyses, your firm can get an edge over its competitors.

Limiting Factors

Due to the disparate data sets, different scanned documentation formats, and a substantial amount of unstructured data, the underwriting process is long and laborious, leading to a longer Turn-Around-Time (TAT). It is often an error-prone manual verification process, requiring trained personnel and takes multiple days, sometimes extending into weeks even! 

With the current competitive lending scenario of digital processes and pressing need for quick response times, lenders face severe challenges in coping with the rapidly changing economic situation and this combined with a dearth of underwriting automation processes, lenders continue to be held back by the expensive manual legacy processes. 

This delay leads to poor customer service and the loss of opportunities to onboard new clients. Other concerns include inefficiency of the process, difficulty in fraud detection, inaccuracy due to manual work and increased expenses due to high dependency and demand for experienced underwriters.

The Way Forward with Automation

So, how can you save time without having to wield your way through a mountain of scanned documents, perform analysis, and present insightful data manually? Here at Perfios, we bridge the gap between data and insights to provide you with a bespoke experience. This is done by automating tasks using our specific financial solutions to enable underwriters to provide more value but in less time. 

We offer objective reports of the financial statement analysis, reducing human error to the minimum thus easing the workload of the underwriter so that they can use their specialized skills towards generating more business for your company. Our products deliver precise and relevant information extracted from financial statements in a concise form, in a much shorter time. These analysis reports are created quickly, easily understood, highly customizable and provide decision-making insights. Underwriters can use these insights and translate them into higher profitability for lending organizations.

Our financial analysis solutions, bolstered by our 13 years of experience, cutting-edge technology with 1700 data formats, offer an intelligent solution for risk and credit decisions. With Perfios, your company can achieve a streamlined financial assessment process, increasing the accuracy of the lending decision while decreasing the processing time.  

Have you got any questions? Drop your questions to wehearyou@perfios.com, and we will answer every single one!

 

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