How does your onboarding experience compare to other lenders?

Dancerace examines the UK receivables finance marketplace to compare different lenders’ onboarding journeys – and shows lenders can get ahead of the pack.

During the pandemic, poor onboarding experiences led 41% of businesses to consider switching banks. 

First impressions count, and your onboarding journey sets the tone for the whole funding relationship.

We surveyed the UK market to see how lenders handle new applications for working capital products. Read on to find out how your onboarding experience compares – and the easiest way to get ahead of the competition.

Note: this article is focused on direct-to-lender applications. We’ll look at broker-managed applications in an upcoming article.

What borrowers want

Before we kick off, it’s worth asking what borrowers expect from any lender onboarding process. 

Today, 92% of us own smartphones and 83% of SME banking is done online. Where business borrowers would have once expected to apply for credit in person, the majority now expect to handle most of their business banking activity online – including applying for loan products. 

For lenders, that means minimising time, complexity and commitment in the credit application process.

Borrowers want to manage their application in one place – with all documents and information accessible for future reference, and multiple staff able to log into the application to complete their ‘part’ of the application.

Convenience is key. Borrowers should be able to apply via mobile, and – crucially – to complete their application in several steps (when information comes from different departments, for example.) Where possible, applications should be paperless, with at least one quarter of UK businesses still working remotely. If lenders can save applicants from having to edit and submit spreadsheets, even better.

The onboarding process should be easy to follow. Key information should be disclosed at the right time. Difficult questions should be kept to last. Lenders can keep borrowers engaged by giving them indicative offers, and showing their progress through the process. 

So how do UK lenders match up to borrowers’ needs? 

Scores on the doors

In short: not very well.

40% of UK SMEs rate their bank’s digital services as ‘poor’. When we surveyed the UK receivables marketplace, we found that the majority of UK lenders still require borrowers to follow manual, paper-based processes to apply for working capital products.

Most onboarding journeys are complicated and time-consuming for borrowers, and expensive for lenders. 

In most cases, borrowers that want to apply for credit must complete callback forms on the lenders’ website or start the conversation via their BDM. The lenders’ sales team then picks up the process.

Traditional onboarding processes like these typically takes months of elapsed time and are heavily dependent on emails, phonecalls and on-site audits. 46% of UK SMEs reported ‘significant delays’ in onboarding since 2020. For borrowers, that means time, hassle and complexity at a time when they most need to focus on other business issues.

Better and best

Happily, a number of UK lenders have recognised the problem – and opportunity – this creates, and are invested in digitising their credit-application and onboarding processes.

These lenders host a simple application form on their website for borrowers to enter their personal and business details and lending requirements. The forms display an indicative lend amount, based on the applicants’ sector, turnover and outstanding receivables, or their turnover only. They also often feature an automated company number searc, and business details are cross-referenced against Companies House’ records.

The best onboarding experiences go a step further still, and allow applicants to connect their online accounting system during the application process.

This allows the lender to extract the applicant’s latest ledger detail for underwriting. The borrower can easily choose which debtors they want funded, with no need for them to download, edit and submit accounting documents to the lender. 

Applicants upload any additional required documentation at a later stage. From this point, the lender can start the sales process with much of the administrative work for the application already done. Underwriting complete, the applicant’s information is passed into the lenders’ core operating system, creating their new account automatically.

This way, the UK’s most progressive lenders can promise a full quote (with limited CPs) within 48 hours, collapsing their time-to-lend. Processing is paperless, and neither borrower nor lender is dependent on email. Lenders can focus on building a relationship with the borrower – safe in the knowledge that they have all the accurate underwriting information they need.

Everybody wins

The best news?

You can get ahead and offer this market-leading onboarding experience, too, with our f3 digital onboarding system. 

f3 enables receivables lenders to offer a digital onboarding experience that minimises time and complexity for themselves and their borrowers. The system offers a simple five-step application flow for borrowers that includes all of the functionality listed above and more, including:

  • Customisable application forms
  • Connectivity to the online and offline accounting systems used by 90+% of UK SMEs, including Xero, Quickbooks, Sage and more
  • A secure-access application portal for borrowers, including email request tracking for GDPR compliance
  • Automated company detail-checks via Companies House
  • Document-upload functionality
  • Automatic account-creation in our c3 backoffice system and e3 client access systems (although f3 can also be used without other Dancerace systems)
  • API access, to allow you to extract borrowers’ application details to your existing CRM

In f3, ledger and financial information is pulled directly from applicants’ accounting systems. This helps lenders to avoid fraud risks, and provides them with access to a rich CRM-data dashboard, including analytics on P&L, B/S, DSO, concentration, ageing, contras and more. Debtor and creditor information can be analysed to invoice-line-level. Tasks can be assigned to other team members. Lenders can ask applicants to upload additional documentation via the secure borrower portal.

Our studies show that f3 saves lenders up to 66% of the time and effort they currently spend on onboarding – saving them money every day.

f3 is now live with our first UK lenders, empowering them to offer the simplest, fastest, and best-supported onboarding experience in the marketplace. 

Will you join them?

To find out more about f3 digital onboarding, contact today.

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