It’s no secret that technology is changing the way the world does business, and change is occurring more rapidly and dramatically than ever before. Business leaders in all sectors have similar stories to tell about how their businesses have been impacted, and the word “speed” is always part of the conversation.
In our private lending business—loan origination—for example, our loans are typically introduced to us by brokers. In the ‘80s, ‘90s, and as recently as the early 2000s, they would send us materials as hard copy—FedEx packages. Now, of course, everything is sent electronically, by e-mail, by dropbox or by other cloud-based file sharing services that allow files to be updated in an instant. As a result, all parties can read the material simultaneously, saving a tremendous amount of time and money.
After origination, the next step is due diligence, and via technology we are not only able to reach out to appraisers with the property information, but can ourselves quickly research information online through various web-based programs that enable us to get an understanding of a property and its surroundings. That is a dramatic change from 10 -15 years ago when one wouldn’t know anything until physically arriving at a property. We didn’t have things like Zillow, CoStar and other resources available online at a moment’s notice that can be shared and reviewed.
And we don’t have to actually visit properties very often any more—I’ve been to two or three properties in the last three or four years, compared to years past when we used to physically go to every property ourselves. We still hire appraisers in most cases, as we did throughout the ‘80s, ‘90s, and 2000’s, but in those days we would visit a property because there were no other means to double-check the information we were receiving. Now that’s all at our fingertips on the Internet.
When the process gets to legal, when the loan documents are prepared, we clearly remember in the late ‘80s, when we had a roll paper fax machine, then a plain paper fax—and we actually had a typewriter at the time! With the advent of the Internet, the ease with which our attorneys and the borrower’s attorneys could communicate and copy all involved has been an incredible leap forward. We can view the information, respond more quickly, and expedite the process tremendously.
Indeed, we can close a loan in three days if someone really has to. That’s a rare circumstance, of course, but if the survey, title, environmental, all the necessary documents are in place, it’s possible because we can e-mail all documents as PDFs, or in a Drop Box. Instead of making several copies, sending them overnight to the attorneys, to the engineers, everyone involved in the transaction, it is accomplished with one e-mail sent to everybody.
And after closing, it is of course important for us to monitor outstanding loans. Today, technology has made it far easier to monitor whether taxes are current, or insurance is current—in the “old days” it was a matter of following up with time-consuming phone calls and being lucky to even get responses back from local municipalities.
In the event of a foreclosure, that process can as well be expedited again through the ease of communication by e-mail. And in the event that we become the “proud owner” of a particular property, it has become increasingly easy to sell a property. Indeed, we sold 35 properties in 2011-2012 and would never have been able to sell these massive properties, ranging from hotels to development land, considering the tremendous amount of information involved, if we had to overnight copy back-and-forth.
Today, everything can be done electronically, allowing for the ease of the transfer of information. From A to Z, it has changed our business—information and technology has drastically changed the whole lending space, and the world. And in particular, for the business world we live in—the private lending world—it’s made an incredible difference.