Supported Decision-Making in Small Business Lending

Lending to small and medium businesses is a costly and labor-intensive process for underwriters. Learn how Enigma’s Signals are making lending decisions smarter, faster, and cheaper.

Problem

It takes about the same amount of time to review a loan application for $20,000 as it does for $2,000,000. Simply locating the data to analyze a small business's creditworthiness is a challenge that requires searching across multiple unintegrated datasets. For many underwriters, this means that lending to these small businesses just isn't economical. Not only do lenders miss opportunities to lend to high-quality borrowers in the $500 billion dollar small business loan market, but they also risk losing market share to emerging technology-enabled competitors like peer-to-peer lenders, who make decisions faster.


Because the underwriting costs for banks to scrutinize a potential borrower's financial records and business plan are about the same for a $2 million loan or a $20,000 one, it's often not worth the banks' time to bother with the smaller sums.

Solution

Signals instantly identifies a borrower's unique data footprint by clustering data that lenders already have together with Enigma's public data repository. This integration of entity data allows underwriters to verify crucial borrower profile variables immediately, saving a tremendous amount of research work, onboarding borrowers faster, and leading to improved client experiences. With the addition of existing loan performance data, Signals learns about a lender's ideal client, becoming more accurate and providing even higher-resolution coverage and results.

A stylized venn diagram

1. Datasets related to verifying businesses large and small are normalized and combined into a single frame within Enigma’s Abstract data platform.

A visualization of entity data linked across multiple sources

2. Enigma connects the presence of a single entity across datasets to verify the borrower’s profile all at once.

A person's head with checkmark

3. An assessment "signal" immediately indicating whether the applicant is a viable borrower smoothly inserts into the lender’s established workflow.

Curious to hear how Signals can help your organization? Contact us below.

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