Loan Star

FormZapper’s debut product, LendingStandard, modernizes the commercial lending process.

Andy Kallenbach has spent years helping companies trade their paper documents for the world of digital document management.

But what he saw in the commercial lending market surprised him. Some of the largest banks still rely on old-school spreadsheets and paper documents to manage major loans.

Kallenbach, founder of document management company FormZapper, could hardly believe it. “It baffles me a little bit.”

That discovery is why Kallenbach’s FormZapper is launching LendingStandard, a Web-based product designed for commercial lending document management.

LendingStandard is designed to be a start-to-finish solution for lenders and attorneys, unlike other products on the market that only solve a particular piece of the puzzle. Lending Standard will walk borrowers, lenders and attorneys through the entire process, starting with the loan application, followed by the processing and eventually to the legal documents that close the loan.

Kallenbach already has major banks across the Midwest interested and eager to know more.

Meeting the Market Need

LendingStandard is earning attention in the world of tech startups, too. The company is receiving support from Digital Sandbox KC, which provides proof-of-concept assistance to tech startups. The Sandbox, which has a goal of generating 10 new high-growth businesses by fall 2014, has been flooded with applications, so being selected is a big boost for any company.

“Their unique solution for commercial real estate lenders fills a big market gap,” said Maria Meyers, the CEO of KCSourceLink and a major driver behind the Digital Sandbox KC. “Over the last 18 months, they have developed a soup-to-nuts solution that covers the entire lending process.”

Kallenbach’s business experience is important, Meyers said, because he has completed similar digital transitions in other industries including health care and education.

“Andy also knows the value of building a strong, diverse team and has assembled a solid management team at FormZapper,” she said.

Digital Sandbox is helping FormZapper develop the processing part of LendingStandard’s Web application. That piece is critical because it will make the new product stand apart from competitors. (Plus, the assistance from the Sandbox will help LendingStandard go to market as soon as possible, a key consideration.)

There’s a reason why the world of commercial lending is a largely untapped market for a product like LendingStandard. There’s no one-size-fits-all solution when it comes to lending money to commercial borrowers.

Many banks already use digital systems for residential loans, but quantifying the process hasn’t been as simple and tidy for the commercial process. Commercial loans are often viewed as too custom for a technology solution, but Kallenbach sees an opportunity.

A Smoother, More Secure Process

Here’s how the commercial lending process works now: A borrower approaches a bank for a commercial loan. As it stands, the borrower might call or visit in person to explain his or her idea and then a trail of paperwork begins.

With LendingStandard, the borrower can use a secured Web-based platform to submit the forms at home. The application walks the borrower along and covers all the pertinent questions.

Then, if a bank decides to make the loan, processing and legal work begins. Often that’s where loans had been held up in a tangle of red tape and paperwork. Titles must be checked out. Contracts must be reviewed by lawyers. Surveys must be completed. Many times the borrower is left in the dark, wondering about the loan’s status. It’s also easy for steps to be overlooked.

“Often you get pretty close to closing a loan, and you’re finding you’re missing something that’s critical,” said Jan Valencia, director of business development, who has 30 years of banking experience.

The previous process has also been stacked with possible security breaches.

There are some banks that regularly use email to collect sensitive information. Borrowers generally find themselves sending a lot of private information through an unsecure method. LendingStandard provides lenders better security.

The application also allows for more collaboration to save loan officers and support staff precious time and money to get the status of a pending commercial loan.

Using the centralized system with clear checklists allows all the players—a lender, borrower and attorney—to get real-time information about the entire loan process. It means borrowers won’t be left waiting and wondering without answers. They’ll know the status of a loan at all times.

Kallenbach knows it might sound a tad impersonal to some borrowers, but the process actually decreases frustration and allows borrowers and lenders to spend their time strategizing instead of pushing pencils.

“A lot of people think that technology is kind of an impersonal thing,” he said. “But it can really help increase engagement and bring you and your customer closer. If you can get everybody on the same page, and a borrower can look at the processing dashboard that we have, and they can talk with their loan officer on the phone, they can all be talking about what they need to be talking about a lot faster.”