In commercial lending, email has long been the go-to tool for managing various stages of the loan process. From the initial contact to the final closing, email facilitates communication between all parties involved. But is email still the best tool for such a complex, multi-step process? Or have we just become so accustomed to using it that we’ve stopped asking, “Is there a better way?”

This article explores the pros, cons, and risks of relying on email for business loan applications. By the end, you’ll understand why email may be holding your process back—and why a loan origination platform might be the solution.

The Parties Involved in a Business Loan Origination Process

Before we get into the problems with email, let’s first look at the key players in a commercial loan process. There are many possible participants on the team:

1. Applicant or Borrower: The business or individual seeking the loan. Borrowers value clarity, speed, and predictability in the process.
2. Business Development Officer (BDO) or Loan Officer: Handles multiple loan applications, often balancing 12 to 15 deals at once. Their priority is finding and closing deals while maintaining strong client relationships.
3. Loan Assistant: Supports the Loan Officer by handling administrative tasks like making appointments, following up with applicants, and keeping things on track.
4. Loan Specialist or Loan Processor: Collects and organizes all necessary documents to complete the loan package. In some organizations, this role overlaps with the Loan Assistant.
5. Loan Analyst: Reviews the borrower’s financial health and assesses the loan’s creditworthiness.
6. Loan Underwriter: Ensures that the loan meets all the lender’s guidelines and policies.
7. Loan Management: Oversees the Loan Officers, tracking performance and ensuring the loan pipeline meets volume and growth targets.
8. Loan Committee: Reviews the loan package and makes the final decision to approve, conditionally approve, or decline the loan.
9. Loan Closer: Works with third parties like title companies and legal counsel to prepare the documents for closing.
10. Third Parties: Includes appraisers, lawyers, CPAs, insurance agents, and contractors who provide services or information necessary to the loan process.

The Advantages of Email

There is no question that email is here to stay as the preferred communication tool for many. Let’s look at what it offers.

1. Ubiquity and Familiarity
Email is universally accepted and doesn’t require special software. All parties—the Applicant, Loan Officer, and other team members—can easily communicate without barriers. It’s simple and well-embedded in day-to-day operations, so there’s no learning curve.

2. Asynchronous Communication
Next, email allows flexibility. Loan officers, analysts, and underwriters can review documents and respond on their own time, which can help manage workloads more effectively.

3. Documentation and Digital Paper Trail
Additionally, email provides a built-in record of all exchanges. This can be useful when you need to trace back a conversation or decision, creating an automatic timeline of events.

The Disadvantages of Email

1. Fragmented Communication
One of the biggest challenges is fragmented communication. For instance, a Loan Officer juggling multiple deals could have dozens of threads for different loan stages, borrowers, and team members. Important details can easily get lost. Many Loan Officers even resort to printing emails to keep things organized. Plus, when not all team members are copied in, miscommunication can occur. On the flip side, the dreaded “Reply All” feature floods inboxes with irrelevant messages, making it harder to track important updates.

2. Lack of Security
Email is not inherently secure, even with encryption. Given that commercial loans often involve sensitive data—such as financial records and personal information—there’s a real risk of phishing attacks or hacking. Loan Closers, who work with external partners like title companies and legal counsel, need to exchange critical documents in a secure, controlled manner. Email is often not the safest method.

3. Difficult to Track Tasks and Responsibilities
Emails don’t provide much help with task management. A Loan Officer might have to send multiple reminder emails just to ensure that documents are collected on time and potentially keep track manually. Email chains are inefficient for assigning tasks and tracking progress.

4. Time Delays
Relying on email often leads to delays. A simple request for clarification could take hours—or even days—if the involved parties are busy. In contrast, a Loan Origination platform provides real-time updates and task tracking, making it easier to keep things moving without bottlenecks. When multiple third parties are involved, tracking all these email threads becomes even more cumbersome, often slowing down the loan’s progress.

Is There a Better Way?

Given the complexity of commercial loans, the importance of the customer segment, and the number of stakeholders involved, email may no longer be the best solution. A loan origination platform can improve task management, enhance security, and streamline communication.

Key Benefits of a Loan Origination Platform:

• Centralized Communication: All interactions are housed in one platform and accessible to all stakeholders, from the Borrower to the Loan Closer, eliminating scattered email threads.
• Task Management: Responsibilities are clearly assigned with visible deadlines and progress updates. This transparency enhances both the customer experience and team efficiency.
• Document Management: Documents are securely uploaded and stored in one place, reducing the risk of lost files or compliance issues.

Conclusion: Should Email Still Be the Backbone of Your Loan Process?

While email has served its purpose in the past, it’s no longer the most effective tool for managing the complexities of commercial lending. With so many stakeholders involved, a more secure, efficient, and transparent system is necessary to streamline communications and improve the overall process.

If your organization is still using email as the backbone of your loan process, now might be the time to transition to a loan origination platform. The benefits—faster processing, enhanced security, and happier customers—are worth it.

mysherpas has the solution you’re looking for. Contact us for a demo to see what the future of lending can be for you.