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Top 4 challenges working capital firms face today

Part 1 of 5: How to overcome with SaaS technology

In this five-part blog series, we identify the top four challenges working capital lenders face and how software-as-a-service (SaaS) technology can help you overcome those challenges today and futureproof your business for tomorrow.*

*For simplicity, we generally define working capital as invoice finance and asset-based lending (ABL) finance. Invoice finance includes recourse and non-recourse factoring, invoice discounting, and shadow ledgering. Asset-based finance includes accounts receivable, inventory, equipment, and term-loan lending. The structure of these lending arrangements varies regionally.

Top 4 challenges facing working capital clients today   

The most common challenges working capital lenders face today may sound familiar.

  • Eliminate low-value touch and increase high-value touch
  • Mitigate the risk of fraud
  • Connect disparate systems
  • Access data quickly

Do one or more of these roadblocks keep you up at night? You’re not alone.

Here are some practical examples of how you can overcome the top working capital lender challenges, differentiate your offering, and grow your business with SaaS technology.

Eliminate low-value touch and increase high-value with self-service

Like most organizations, you’re probably doing more with less. So, throwing people at a problem is not a feasible solution – especially when SaaS technology is faster, more efficient, and more reliable.

SaaS technology provides a solution to eliminate low-value touch primarily through a 24/7 self-service borrower portal, which is one of the products we offer.

One of the most powerful things we can offer is customer self-service to available funds. The value of the borrower portal is the ability to quickly gain access to their credit line without having to speak to a collateral analyst if they are in formula. This frees up the collateral analyst to focus on out-of-formula requests making their time far more valuable (high-value touch).

Introducing accessibility to information your customers need right now at the borrower level removes the collateral analyst from a low-value conversation. As a result, your staff can use their time on high-value touches to build relationships with customers with more meaningful conversations, selling more product, getting better pricing, etc. This adds high value to you and your borrowers, and that is where you want to spend your time.

Mitigate risk of fraud with APIs and reporting

Gathering insights from multiple sources – enabled by application programming interfaces (APIs) – provide critical information to take care of your customers as well as mitigate fraud.

We understand you don’t want to take any unnecessary chances as well as the importance of staying out in front of potential risk such as underwriting or fraud.

APIs and reporting are the heroes to help working capital lenders mitigate risk. Our API ecosystem includes partnerships with a number of credit reporting, ID verification, accounting, and risk applications such as Equifax, Experian, GBD, Validis, Equiniti Riskfactor, and more. They offer plug-and-play solutions for trend/fraud detection, for example.

The best way we can mitigate fraud is to receive data from multiple sources on a timely basis – information such as the borrower’s aging report, borrowing base certificate (BBC), receivables, etc. Accessing a real-time view of collateral value and making that information available in any reporting form you need to see it will help predict risk in your investments.

The best way to mitigate fraud:
Receive data from multiple sources on a timely basis
Borrower’s aging report, borrowing base certificate (BBC), receivables, etc.

Guarding your portfolio is so important to us, it’s in our mission statement: We guard your portfolios by being precise and reliable.

 And that’s where SaaS technology, APIs, and data streaming, which we will touch on later, can help mitigate risk.

Connect disparate systems with APIs

Finding a way to connect multiple internal and external disparate systems is one of the top challenges facing working capital lenders today. Our Solifi open finance platform allows us to connect and innovate with third-party solutions via an extensive API gateway.

These API-based technologies allow internal and external disparate systems to talk to each other in real-time and gather meaningful insights (i.e., API ecosystems).

No modern technology can efficiently operate without connecting to other technologies in the ecosystem. We have built a strong and diverse ecosystem of partners and are continually expanding our ability to integrate with leading third-party applications, such as Validis, DocuSign, Equifax, Equiniti Riskfactor, etc.

Essentially, we offer a growing marketplace of pre-built and supported integrations to third-party software solutions that you can use across your entire enterprise.

Access data quickly with data streaming  

Accessing data is one of the most common challenges working capital firms face today. And it’s more than simply having the data. You need information or the elements of data available in any way you need to configure it.

Data streaming is the solution to access data quickly and SaaS technology is the perfect model to enable you to receive data you need. It delivers:

  • Near real-time access to data in a consistent data format (i.e., Kafka Streams – a client library for building applications)
  • Data transparency
  • Flexibility to access the data you require
  • Ability to quickly integrate into your data warehouse for use with data visualization and analytics tools

And we provide it in a way that makes sense for you – where you can get the most value and insight. For example, last month you generated a report that fit your needs at the time. However, now you want to add three different elements. Rather than using static information, you can easily pull current information that has been streamed to your data warehouse for a real-time view of portfolio attributes.

This immediate access to your data allows you to assess, report, and react quickly. And that’s possible through data streaming from the Solifi open finance platform.

Data – a common thread in top four challenges facing working capital lenders

The common thread in all four of these challenges is data – mitigating risk, communicating across systems, making it readily available for analysis, and sharing with your borrower. And SaaS technology is the pathway to data and the driver to differentiate you from your competition, optimize business operations, and provide value and a better experience for you and your customers.

Who is Solifi? And how can we help you?

Solifi, formerly IDS, White Clarke Group, and William Stucky & Associates, offers two working capital solutions to support your working capital needs. These robust solutions allow you to offer high-value service while providing:

  • Reduced operating expenses
  • Quick access to data and greater data transparency
  • A positive customer experience, such as an online borrower portal enhanced with self-service functions for quicker funding turnaround times

We offer an open finance platform designed to scale with you – whether you focus on working capital (asset-based lending, invoice discounting, factoring), geographically, or expand to other categories (e.g., equipment, wholesale floorplanning, automotive finance, etc.).

For example, if you’re a bank in Australia, and currently serving equipment finance firms, we can help you grow in what’s known as the invoice discounting market (aka ABL most elsewhere). This is an untapped market opportunity for banks. And we can guide you to enter this space with ease.

That’s because we brought together market-leading secured finance solutions onto a single open finance platform, which delivers applications for automotive finance, equipment/asset financewholesale floorplanning, and working capital.

Open finance platform – a holistic solution for a fragmented industry

We recognize that the entire secured finance industry is fragmented. Many secured finance clients serve multiple lines of business, so we wanted to offer you a comprehensive portfolio of solutions that are all integrated and sit on our secured open finance platform – where everything you need is in one place with one provider. It’s designed to more closely align with how you do business.

With our open finance platform, you benefit from operational efficiencies that are repeatable and scalable from one part of your business to another and from one country to another. Guarding your portfolio is so important to us, it’s in our mission statement: We guard your portfolios by being precise and reliable.

And to help make it easier and accessible for you, our holistic technology platform means that any size lender can benefit from our SaaS platform. The same solution we offer to larger working capital firms is the same technology we offer smaller organizations like regional and community banks – where you only pay for what you use.

Learn more about how Solifi’s open finance platform and SaaS-in-the-cloud technology can help you overcome your top challenges and unleash your potential.

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