A new report from Austin, Texas-based Rabbet, an intelligent construction finance platform, found evidence of digital readiness among lenders and developers in an industry that has historically been slow to adopt new technology. Recognizing the potential impact of artificial intelligence and automation, more than 70 percent of lenders surveyed agree that aspects of the draw process can be automated, and 67 percent of developers think automation will expedite the process.
Additional key findings include:
- None of the developers surveyed believe their lender’s process is streamlined of efficient, and 42 percent report the process is frustrating, slow or painful.
- According to respondents, only 48 percent of data used for construction draws is centralized in a system, leaving over half trapped in spreadsheets, PDFs and emails.
- Although surveyed lenders and developers have different perceptions of the state of construction finance, both lack confidence in the process. A third of the lenders do not have portfolio-level reports, and nearly 50 percent of borrowers are not confident that they submit draw requests with all required information.
Source: 2019 State of Construction Finance Report, Rabbet
“We continue to hear from both lenders and developers that there are inefficiencies in the current construction loan process, underscoring our mission to fuel the connected construction economy,” said Will Mitchell, Rabbet’s CEO. “Construction financing is only getting more complex as competition increases and more people are involved. Lenders and developers are demanding technology that intelligently drives confident decision-making and quicker disbursement of funds.”
Conducted in April 2019, Rabbet surveyed qualified commercial lending executives and real estate developers with portfolios ranging from under $10 million to more than $1 billion. While some respondents report using a system like Rabbet to manage their construction finances, the majority of respondents did not.
To download the full report, click here.