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Lendr uses low code to simplify small business credit lines

Mark Chillingworth Profile picture for user Mark Chillingworth May 23, 2024
Summary:
Underwriter turned tech leader Nick Mates explains how Lendr uses low code in straight through process-oriented banking

Image of Nick Mates, VP of Operations and Technology at Lendr
(Image sourced via Lendr)

Small businesses need simplicity and to receive answers quickly. The business owner needs to focus on what they deliver, whether that is a product or a service, so financial dealings cannot get in the way of doing business. 

Founded in 2011, Lendr has brought a Fintech-like approach to the small business community of the US by remaining a relatively small organization, having a tight focus on its mission and ensuring its business processes and, therefore, technology reflects the needs of its customers. Head of technology at the Chicago headquartered business, Nick Mates, explains how application development has been paying its way for Lendr. 

Lendr was founded in 2011 as a direct lender to business owners who need rapid access to capital. Mates, VP of Operations and Technology at Lendr, says of the organization: 

Our average turn-around time is two days, whereas with a traditional financial institution you are looking at two months. Our core ethos is to provide the customers with the working capital that they need to grow or remediate problems in the business in the short-term.

We provide small business finance across 48 states. They are the under-banked businesses with one to 50 employees and they need short term capital for inventory expenses such as a key piece of infrastructure.

He cites the example of a pizza restaurant needing to replace a broken pizza oven, a capital expense that can sink a business by either ending its ability to bake pizzas or doesn’t have savings available to cope with capital investments. Lendr has a self-developed decision process that uses multiple datasets and a multivariate scoring system to analyze the customer individually.  

Though only formed in 2011, the business carried out a review of processes in 2021 to simplify operations and technologies. Mates says: 

We had four different code stacks, from C# to an off the shelf customer relationship management (CRM) that we had tried to plug in to different processes for payments. We needed to consolidate the stack so that we had a single code stack for our developers.

The aim of this technology consolidation was to ensure that the developers and technologists were working on developing business value, and Mates says this has been achieved with little involvement in infrastructure maintenance. 

Build, not buy

As an organization whose purpose is to enable people to build businesses, Lendr decided to build applications for its staff and customers that were instrumental to the straight-through processing foundations of the business. Mates says it was clear that the niche focus of Lendr meant developing their own technology, adding: 

Rather than trying to buy off the shelf and then trying to transform it to do something it wasn’t built to do.

CEO Daniel DeMeo advocated the use of low code technology, something he had seen make a difference to challenger financial services organizations in a previous role. Following an evaluation process, Lendr partnered with OutSystems: 

Every single end user interface is built in low code and we segment them based on the domain needs, so our underwriting team has a portal for their process workloads and our sales team have their own portal and they all connect to a data infrastructure. This allows for that use case per department. We now have 18 end-user interfaces.

These applications sit on an SQL server infrastructure that Lendr already has in place. Mates says they investigated adopting the OutSystems cloud infrastructure, but the economics were not sufficient to justify the move; he says: 

We run lean in technology and we are focusing on business value rather than revolutions in technical infrastructure.

To ensure the existing team of technologists got on board with the adoption of low code, Mates says Lendr carried out a low code evaluation with a proof of concept. He says:

There were some that said low code is not real code. So a lot of the conversations I had with the developers were about ‘do you want to derive business value or do you want to do a manual process?’ There are developers who see themselves as a conduit for business value-add and there were individuals that wanted to be in the weeds of the most granular details.

OutSystems is compiled on C#, which made a case for the technology at Lendr. The financial services organization is also a C# shop. Mates says: 

We wanted to make sure that anything built could clearly be a Lendr brand with that customizable experience, not only in the way the user interacts but also in presentation.

Integration with technology from other members of the financial services ecosystem was also important. Lendr apps have to connect to between 20 and 30 third party vendors and Mates says there has not been a single case of a failed integration. Which, he says, given the complexity of the systems at some credit reporting agencies and payment processing suppliers is a major result. There are also 150 partners using the Lendr broker portal. 

The client portal is used by over 400 businesses and has replaced an email-based business process, which created delays for borrowers and Lendr. Self-service account management saves Lendr four hours a week for its collections staff, with additional savings for the sales teams. 

Lendr benefited from its adoption of low code in 2020, when the pandemic enabled the Chicago team to quickly develop an application to support existing clients process the Paycheck Protection Program (PPP), which was enacted in April 2020 as a business loan from the US federal government to help small businesses pay their employees. Six hours after gathering the requirements to administer PPP, Lendr launched an App that helped small business owners identify the funds available and auto-complete the documentation using Lendr information. Over 100 existing customers applied for PPP using the App, and a further 150 became Lendr users. 

That pace of delivery remains, Mates says: 

We are seeing individual developers doing 100% more tickets and a 40% reduction in the defect rate. We had 200 deployments to production by a team of three last year as it allows us to automate a lot in the software development lifecycle.

Mates began his career as an underwriter determining credit worthiness of customers, and he joined Lendr in 2017. As a small challenger organisation, he moved sideways into a business analyst role and from there into technology.

My take

This is not my first interview with a financial services firm using low code to simplify its processes to suit the needs of customers and then benefit its business. Back in 2019, I detailed how Personal Group had used low code to develop a set of applications for the employees of businesses that were Personal Group clients. In both cases, low code allows these organizations to create apps for distinct customer groups and employees, all of which are connected to a single infrastructure. What low code does well for businesses like Lendr is to allow that plethora of products and experiences to exist, but in truth, it is identical technology and, therefore, a simple underpinning. 

 

 

 

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