Hospitality financing marketplace CrediVia recently opened a new platform for borrowers to make the commercial loan process simpler and faster. The team that created CrediVia represents both borrowers and lenders in the hospitality industry who became frustrated with the process for finding and securing financing for hotels.
The platform uses technology to mitigate the headaches that both borrowers and lenders face in a traditional commercial loan process, match each loan request to viable financing options, and see a deal through to closing. Through a subscription model, borrowers can centralize data and documents for their loan requests and submit to multiple lenders without needing to enter and upload the same information more than once, saving time for both sides.
LODGING caught up with Heather Duvall, CrediVia’s chief revenue officer and a former lender, during The Lodging Conference to discuss how the platform is using technology to streamline hotel financing and what that could mean for the industry.
What impact does the CrediVia platform have on the traditional commercial loan process?
We’ve always had this manual, antiquated loan process. What we’ve done is we’ve brought it to the cloud. It’s now digital and intuitive for a borrower to fill out an application—the questions they are asked change based on the specific loan type or loan purpose, so they don’t have to leave things blank or write ’N/A’. They publish the application to the marketplace and it goes out to our network of lenders. They set lending criteria for what they want to see, like certain states, certain brands. For example, if they don’t want to see new construction, they uncheck the box. That way, lenders aren’t spending all this time sifting through deals to figure out if they fit their box.
As a former lender, I can’t tell you how many millions I have reviewed that just don’t fit the box but you have to take the time to review and analyze the deal. This is narrowing the focus for the lender. We’re providing them with reporting to expedite their loan decisioning.
Then, once the borrower chooses which lender to move forward with, they can review all their indicative terms or proposals. They get a checklist that is facilitated through the portal, and they can assign internal and external users to each line item.
How does the subscription/fee model work for borrowers and lenders?
On the lender’s side for 2018, it’s free. For 2019, it will be a subscription model based on how much volume they originate from the platform. For the borrower, it’s a transaction fee of 0.35 percent—much less than what they’re currently paying if they’re engaging a mortgage broker.
What kind of timeline can borrowers expect compared to the traditional timeline?
We’re still limited by whatever the lending policies are for the lender, but we’re streamlining it for both sides and not going through as many iterations of the lender requesting documents from the borrower and the borrower having to piecemeal those out. Everything is housed in the portal for the borrower—the documents are there, they just have to release it to the lender. You could cut the time in half, easily.
It’s really going to change things for the borrower and the lender. The borrower’s going to be able to throw out their net—and it’s going to be a wider net to cast, too—to get more competitive terms. Even if they had a local relationship that could offer terms on a deal, they could still run it through the portal to see if it’s really competitive, or if there’s something better out there. They’re not paying anything unless they close on the transaction.
Will this reduce barriers for some borrowers to find financing?
The portal is enabling borrowers to come more prepared to the table. I remember my very first deal that I ever wrote when I was a lender, I had hand-written personal financial statements and projections, and so if that borrower had this portal at the time, then he would be presenting his loan in a more professional manner. We provide all the reports that go off to the lender, and it’s all in a very professional package. They can present themselves better that way.
What kind of potential do you see for this technology in the future?
We’re really excited for planning for the future and what the next phase is going to hold. There’s AI integration that can take place or partnerships where we could bring competitive data in to help support a loan request. Also, making it simpler for the borrower to get their data in the system, by scanning documents and having those auto-populate, versus hand-typing that information in.
Where do brokers come into the platform?
The plan is to offer what we call a white glove service for people that want to focus on their operations and still want to utilize something to help organize and structure their deal similar to what they would get from a mortgage broker. The plan is that we will have a subscription model for the brokers to subscribe to the platform and offer their services. They’re not able to originate on the platform directly, but a borrower can add a broker as an external user to help facilitate the deal.
What does the launch of this platform mean for hotel owners?
For hotel owners, they will walk away with an assurance that they have the best terms because their application has gone out to the entire lender network and they can feel confident in the terms that they’re getting. And they’ll be getting feedback a lot quicker than filling out an application with one lender and then with another lender and going through all their different processes. It’s not going to be as difficult anymore, so they can focus on what they do best—whether it’s developing hotels or operating hotels.