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Contracts accelerate small business, home loan approval rate

by Andrew Moreau | July 18, 2021 at 1:55 a.m.

Two recent stars of the Little Rock Venture Center's community banking accelerator program are continuing their winning ways by securing federal contracts that ease approval of small business loans and home loans.

Teslar Software of Springdale reports that its banking technology supported more than 20% of Paycheck Protection Program loans issued by community financial institutions this year.

The 1.3 million loans powered by Teslar represent $22 billion of funding for small businesses across the country. The fintech received approval of 80 loans per minute during peak times, according to the company.

In 2018, Teslar won the banker's choice award during the venture center's ICBA ThinkTech accelerator program, which is sponsored by the Independent Community Bankers of America.

Another community banking winner, Lendsmart of New York, announced last week a partnership with federal lender Freddie Mac to reduce loan origination processing time for lenders and borrowers.

The company will integrate its artificial-intelligence-driven lending platform with the federal agency's underwriting system, a move that will shave weeks off the lending process and speed up approval for borrowers.

In 2020, Lendsmart was the overall winner of the ThinkTech competition.

When the Paycheck Protection Program was launched in March 2020, Teslar saw an opportunity and quickly offered products and educational tools to financial institutions and nontraditional lenders participating in the loan initiative.

As the loan program continued -- it ended in May this year -- Teslar partnered with startups, other fintechs and banks to process PPP loans. The company says five of the top lenders nationwide used Teslar software to process their PPP loans, which were administered by the U.S. Small Business Administration.

"The Paycheck Protection Program was successful because the entire industry joined together to work towards a common goal: helping small businesses persevere," said Joe Ehrhardt, chief executive officer and founder of Teslar Software. "The technology we built and the lessons we've learned through this experience have inspired our company to create new strategies and efficiencies to help community institutions succeed."

Now, Teslar is taking what it learned in the PPP process to remove the approval bottlenecks that surfaced in the loan process.

The approach, which integrates Teslar's software into a bank's core system, will allow banks and other financial institutions to digitize all aspects of their commercial and SBA lending processes that are now entered manually. Teslar's effort will speed up approvals.

The company plans to roll out the new module in three phases through 2022.

"This new module will arm institutions with the tools necessary to strengthen business relationships with greater confidence and will change the future of commercial and SBA lending," Erhardt said.

BUSINESS MENTORING

The University of Arkansas is offering a new service matching entrepreneurs with mentors, including venture capitalists, serial entrepreneurs, business executives and finance experts.

Founders of start-ups and young companies who are affiliated with the university, either as students, alumni, faculty or staff, will be able to access a network of mentors who can accelerate and support the growth of their businesses.

A kickoff event earlier this month attracted more than a dozen potential mentors to the program. The first mentoring meetings are scheduled to start in August.

The initiative is part of the university's Office of Entrepreneurship and Innovation. Volunteer mentors will follow a methodology established 20 years ago at the Massachusetts Institute of Technology and adapted for Northwest Arkansas' entrepreneurial community's unique assets and needs.

"We believe mentors who find it a well-organized and rewarding experience will recruit additional mentors over time, and entrepreneurs who attribute some of their success to the program will also give back," said Shaheen Lokhandwala, program manager of entrepreneurship initiatives.

Using a team-based approach, mentors will provide practical advice and make recommendations that develop the entrepreneur as well as their company. The primary goal is to support the entrepreneurs' development and success by their own definitions.

Additional goals include strengthening opportunities for early-stage financing and the creation of jobs that retain entrepreneurs, engineers, software developers and product managers in the region.

More information is available at entrepreneurship.uark.edu.

SMALL BUSINESS SUPPORT

Minority entrepreneurs are invited to join a three-part business development series focused on improving business systems and strategies.

Sessions will be led by Mario Wallace, an expert in process improvement, change management, leadership development and strategic management. The program is free for participants.

Online sessions will be held on Monday evenings -- Aug. 2, 9 and 16 -- from 6-8 p.m. Topics will include marketing systems to acquire and retain customers, upselling, building a culture of trust, developing value-drive operations and budgeting systems.

The initiative, called "Small Business Strategies for Success," is sponsored by the Arkansas Small Business and Technology Development Center in partnership with Remix Ideas and Hope Credit Union.

Courses are designed for prospective and current entrepreneurs of color interested in starting a business on a strong foundation or seeking to improve systems in an existing business.

Wallace will discuss key business systems, the roles the systems play in day-to-day operations and methods for using systems to create consistency, efficiency and stellar customer service.

More information is available at asbtdc.org.

Column ideas or recommendations? Thoughts or musings that need pursuing? Contact me at amoreau@adgnewsroom.com or at 501-378-3567.

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