FCCS News & Insights

Digital Solution Manages Construction Lending

Construction loans require more ongoing attention than a simple term loan, with the full amount paid out in increments as the building progresses. Loan officers need to stay current on each step of construction, ensuring adequate documentation before releasing funds being demanded by impatient contractors – and many are doing so using manual processes like spreadsheets. Passkey Partner Built Technologies has developed a powerful, efficient and easy-to-use solution.

“Construction is the second least digitized industry in the country, preceded only by agriculture, so it’s no surprise that there hasn’t been an integrated solution before now,” says Scott Thissen, Built’s Vice President of Sales for Community Lending. “Built offers the opportunity for lenders to digitize and modernize, reduce risk and create efficiencies, while maintaining a positive, advisory relationship with customers.”

Whether a residential home, grain silo or water treatment plant, Built supports milestone-based construction funding that includes multiple draws across the term. Through Built, the customer, contractor/builder and lender have a mutual understanding of the funding plan, establishing transparency that leads to collaboration and efficiency. With milestone requirements agreed upon and captured in the platform, customers face fewer penalties and builders receive timely payments, which leads to on-time completion and the beginning of loan payments.

“More than just a draw management system, Built is a technology platform for everyone involved in real estate and construction lending, from the borrower to the bank,” says Scott. “We’ve streamlined the financing process from underwriting to construction completion, replacing the time-consuming, manual processes otherwise being used.”

Built tracks the complete construction process, from executing title searches to whether permits have been obtained, to whether work has been completed so funds can be released. The built-in photo function supports remote inspection: contractors can easily upload images of completed work to prove that milestones have been reached; for added risk reduction, the system includes geolocation to identify where exactly each photo was taken. Photos are immediately available to the loan officer, who can approve the disbursement, and the accounting team, who can make it happen.

Built integrates with enterprise platforms, including a direct integration with nCino, enabling lending teams to easily compile a customer’s full portfolio: they can manage the construction loan process in the custom-built tool and push relevant data to the system of record. Integration is fairly straightforward, scaled to accommodate varying numbers of users to be trained and the size of the portfolio, and is typically completed within 90 days.

Built has been supporting Farm Credit since 2018, with currently half of Farm
Credit Associations employing the platform. Passkey Members receive free photo
digitization through Truepic functionality. For more information, visit Built on the
Passkey website.

About Passkey
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For more information about Passkey, visit our website or contact Heather Tseng,
Passkey Sales and Marketing Director at 303.903.8544.