If there is anything, the COVID-19 pandemic has taught the commercial real estate management industry is to adopt e-Asset management when applying for a mortgage loan. Suppose you are a small business, mortgage company, or financial institution. It is vital to find out how eAsset management can improve your chances of securing a quick cash loan using your long-term asset as collateral.
How does eAsset financing work?
If, for example, you own a small business and require a loan, the lending institution will ask you to produce a balance sheet. The lender will look at your assets, current inventory, and other short-term investments to determine if you qualify for a loan. asset financing works in two ways:
1. Use of assets
In a scenario where you have just started your business with equipment, machinery, and additional capital assets, you can ask your lender to secure you a loan to allow you to utilize them. That means you continue using the asset and temporarily possess it as long as you regularly make payments.
2. Use of collateral
eAsset financing can also apply when a borrower submits a long-term asset such as land or depreciating assets such as vehicles and machinery as a form of collateral. Unlike traditional financing, you will not have to prove your creditworthiness as long as your asset’s value coincides with what you are expected to pay plus interest. Collateral may include temporary investments, current inventory, and the amount generated in accounts. In a case where you default on your loan repayment, your lender reserves the right to confiscate your long-term asset.
E-asset management has revolutionized commercial financing in the following ways:
1. Minimizes time wastage
It takes time to prepare, reconcile, and implement a financial statement, compromising your time to focus on your most important goals. E-asset management is all about creating accurate real-time data through automation solutions. Incify.co, a leading Asian inbound marketing firm, asserts that choosing a valid automation agency helps produce satisfactory results in time to secure your loan. A service that initially took an hour will probably take less than five minutes, thanks to automated solutions.
2. Cost savings
Traditional asset management involves producing a massive load of paperwork to lenders each month to match mortgage repayment. Processing and analyzing all that data requires a lot of money. Since every business’s primary goal is to spend as little to gain as much, a small business might not be in a position to sustain all this paperwork.
Advanced technology is all about saving time and money. Once you start managing your assets electronically, it is easy to balance your profits against your losses. Lending institutions also encourage businesses to incorporate electronic asset management to save money spent on countless errors.
3. Improvement in data accuracy
Businesses that still rely on traditional asset management are at risk of encountering countless errors due to manual work. Lenders have to keep monitoring your business performance to determine if you are eligible for financing. Besides reviewing your credit history with other lending institutions, they rely on your data to assess your asset’s value as well as how your business is performing. As commercial mortgage financing keeps revolving, companies will need to automate their asset management by joining electronic platforms to grow.
4. Improved operational efficiency
What are the odds that using traditional e-Asset management solutions could hinder your chances of getting a commercial mortgage loan due to operational inefficiency? The more an organization spends assessing data through scanned documents to feed them in Excel sheets only to convert them into servicing terms, the higher their chances of undertaking other essential tasks. E-asset management delegates these activities to machines for automation hence improving productivity.
Electronic asset management might not have been popular back then, but going by what mortgage loan companies have witnessed in recent years, eliminating traditional solutions could be the only solution to avoiding costly and time-wasting paperwork. If your business has experienced massive losses and decreased productivity due to conventional asset management, it is time you looked at the e-Asset management way. That way, businesses will not have to worry about getting rejected when applying for mortgage loans due to data inaccuracy.