The 600 Page Gorilla

Author: Joel Weingarten

If your staff is spending too much time smelling the coffee while the zip files download, and drinking too much of it as they pore through 100’s of pages of loan draw docs – you might want to look into Construction Finance Optimization software … CFO for short.

“Dear Ms. Moneypenny,

The deadline to fund the Goldfinger loan came and went before the Borrower advised that their loan draw files bounced back due to exceeding our email system size limit.  Distraught, I was at least able to take a 15-minute walk in the sunshine as the 167 MB zip file they then uploaded to their Box folder downloaded on our side.
But then I got to page 609 – the end of the PDF – and still couldn’t find the Contractor’s unconditional lien waiver.  Two emails (and 90 minutes) later I discovered it was there all along – on page 498.  Don’t know how I missed it.
I was stirred (but not shaken) over the ordeal and figure there’s got to be a better way.  That’s what Bill Oddjob told me when he resigned last week, complaining that he signed on here for a loan due diligence valueadd job but felt – and was treated – increasingly like a slave to the data, as he grabbed his hat and left.  A very odd job indeed.
As you’ve told us, a big part of your job is to remove obstacles for your loan administration team.  So I am asking with the utmost of respect, Ms Moneypenny, tear down this 600-page gorilla!
James Payemint Bond”

Funds Control meets Electronic Escrow

With the advent of CAD software and construction project management software, there’s been a proliferation of construction loan draw information that’s created these 600-page loan draw request packages.  Fifteen page subcontractor billings (times 15-30 subcontractors) and are not uncommon, nor are 30-page Change Orders or Offsite Stored Materials docs.  It’s easy for the GC to electronically generate and combine all that into a PDF and throw it over the transom.  The Borrower piles on by adding their additional 50-100 pages of Draw docs and other prime contractor invoices into the “consolidated” PDF.
CFO software tames the 600-page gorilla by electronically linking the funders, borrowers, and vendors in the construction project payment chain.  When each party self-serves their documentation – legal and financial – into the chain, the information is structured and available to each other party that needs to view and evaluate it.  The CFO workflow spots deficiencies, and when all is order the system’s payment platform (often a nationally chartered bank) receives the loan draw from the Borrower’s direct deposit account (DDA) and makes electronic disbursements according to the uploaded mutually agreed payment instructions.  Simultaneously and swiftly to multiple parties.
Financial and other project information are archived in a searchable manner, and a really good CFO system can even make accurate predictions of project cost-at-completion and completion date based on that data.
Isn’t that what good software is supposed to do?  Effortlessly manage large chunks of disparate data, automate approved payments, and provide insights so that staff can perform higher value activities.  Like see early warnings of loan shortfalls, loan ratios out of balance, or increased risk from payment failures.  And the silver lining is you might retain the James Bond’s and more easily recruit the next gen workforce.