Commercial Loan Application Processing Cycle Time

Commercial Loan Application Processing Cycle Time

KPI Details

Commercial Loan Application Processing Cycle Time is the measure of the number of calendar days needed in order to process a commercial loan application, from the time the initial application is received from the customer to when the application is sent to underwriting for review. This is an important metric in understanding the efficiency of administrative functions and the effect on application review cycle times and customer satisfaction. Extended cycle times for this metric may be due to poor employee performance, sub-par training, a lack of job aid or process checklist use, incomplete or inaccurate applications that require additional follow-up with applicant, poor quality of processing which requires additional work to fix errors, or redundant, low-value application processing work steps.

KPI Definition

The number of calendar days required to process commercial loan applications, measured from the time the initial application is received from the potential borrower until when the application is submitted to the underwriting, or risk management, function.

KPI Best Practices

• Clearly communicate info and documents needed from customers for applications and provide them with regular status updates
• Perform regular audits of application process to identify potential reductions in rework, number of touchpoints, etc.
• Create standardized and validated data inputs on loan applications to minimize input errors

KPI Calculation Instructions Commercial Loan Application Processing Cycle Time?

Two numbers are used to calculate this KPI: (1) the number of calendar days required to process a commercial loan application (measured from the time the initial application is received from the potential borrower until when the application is submitted to the underwriting or risk management function), and (2) the total number of commercial loan applications received. Include business days as well as weekends in the numerator. The date at which the application is received is the date from which the customer submits the application to the financial institution, regardless of area.

KPI Formula :

(Sum of Calendar Days Required to Process Commercial Loan Applications) / Total Number of Commercial Loan Applications Received