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The commercial lending market is highly competitive right now.
Improvements in technology and strong governmental support have simultaneously encouraged more competition and a significant increase in the number of new lenders entering the market. As a result, non-traditional lenders, also known as challenger banks or alternative lending providers, now account for 60% of annual gross bank lending to SMEs.
When competition is fierce, success depends not only on finding new business customers, but on uncovering the hidden opportunities to serve those that have been declined funding, or indeed completely inactive potential customers.
Every year, lenders are missing out on millions in bookable lending from viable borrowers who were either rejected or approved but didn’t take up offers.
Are you ready to unlock these hidden opportunities for growth?
The missed potential behind declined applications
There are over 5.5 million SMEs in the UK, and around 30% of these have sought finance during the last three years, according to The British Business Bank. This equates to approximately 1.7 million businesses. Shockingly, over 50% of SMEs whose applications are declined do not seek alternative lenders.
Perhaps even more alarming is that, according to data from Experian, up to 22% of declined commercial loan applications were from low-risk businesses. Customers that eventually secured lending elsewhere and performed reliably. That translates to tens of millions in potential lending lost each year.
In fact, some lenders found as much £14m of additional business identified that could have been written without increasing risk appetite.
We’re not talking marginal cases. This represents a large hidden group of viable businesses ready to borrow, but consistently overlooked.
Why? The answer is poor data, legacy systems, and a lack of visibility into customer financial health; this translates into an inability to balance risk and opportunity effectively.
And, what about those that do not take up funding?
Of course, it’s not just poor decision making around rejections that cost lenders. There’s also the fact that many of those declined businesses don’t move on to seek funding elsewhere. Even worse are those approved application that do not convert and are not even followed up.
According to The British Business Bank’s latest Business Finance Survey approximately 30% of applications are discontinued, turned down, or failed to deliver the full amount of finance applied for. As a result, there’s been a marked increase in the number of businesses who gave up, cancelled plans, or put their plans on hold due to issues accessing funding.
This is a huge blind spot, and yet also a huge opportunity to differentiate in a crowded market.
Often applications aren’t taken up, or are cancelled due to complexity, poor onboarding experiences, lack of follow-up or unnecessary delays in the application process. This undermines lender performance, especially when these applications could have been saved if the lender were equipped with the data-driven intelligence to spot hidden opportunities, drive more accurate decision making in terms of risk vs. reward, and become more proactive around customer engagement.
Traditional approaches are falling short of the proactive financing businesses require
A major factor behind these missed opportunities is incomplete data, leading to a lack of ability to lend smarter and support faster.
Many lenders still rely on siloed financial data, outdated risk models, and manual checks. These often result in unnecessary declines, or missed opportunities to re-engage customers that do not take up lending offers.
The cost? Not just lost revenue, but missed opportunities to build relationships with the growing number of businesses seeking finance in the UK. Indeed the SME sector alone is expected to require finance to the tune of £70 billion by 2030.
Mind the gap: How to find the hidden wins
To unlock these opportunities, lenders need more than just better models, they need access to real-time insights into a commercial customers’ full financial footprint.
Until now there was another glaring gap. No single fintech provider had the capability to deliver the total market view of risk and opportunity across customer portfolios needed to equip lenders with the clarity to lend smarter, support faster, and grow stronger client relationships.
Usher in a new era of smarter lending with nCino ProBanker.
ProBanker uniquely consolidates financial data to deliver a view of every business customer’s liquidity, debt exposure, and cash positions, helping lenders quickly identify viable applicants, even among those previously declined or dormant.
Through intuitive dashboards and automated alerts ProBanker delivers total real-time insight into a customer’s financial stability, current banking arrangements and outstanding financial commitments, as well as credit search data to identify businesses actively looking for financial products - giving early insight into changing credit needs.
No other platform available in the market right now has the richness of data or AI-powered capability needed to reveal hidden lending opportunities without increasing risk exposure or workload.
Opportunities hide in the gaps, make sure you don’t miss them
Rejected or disengaged applicants, if properly understood and engaged with, can become some of the strongest additions to a lender’s book of business.
To truly compete in today’s market, lenders must stop seeing declines and applications not taken up as dead ends, and instead start viewing them as opportunities for growth.
Explore and never miss an opportunity again. Book your free discovery session now:
- Guided demonstration and executive briefing of nCino ProBanker
- Walk through of functionality, data processing, and how we deliver ROI
- Deep dive into your business goals to produce a customised recommendation for implemenation and transformation.
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