Small Business Lending & the Internet.(National Penn Bank)(Product Announcement)

National Penn Bank builds solid customer relationships using an innovative Internet-based loan-processing tool. It helps the bank increase small business loan volume, margin control, underwriting consistency, decision speed, and customer satisfaction while reducing costs and delinquencies.

National Penn Bank is using a new, comprehensive banking solution for small business lending that is remotely hosted and accessible through a browser. Using Internet-based Application Service Provider (ASP) technology, the solution simplifies small business lending.

National Penn Bank now manages its complete small business loan application process--from inception through document preparation--with this new technology. Without hiring additional loan officers, National Penn has been able to:

* Increase its loan volume.

* Improve the profitability of those loans.

* Reduce delinquencies.

* Make unsecured loan decisions up to $100,000 in about half an hour.

The Marketplace

A 1998 study by Mendis Corporation, the North Carolina-based market research firm, showed small business as the fastest-growing segment of U.S. business. The study also found that small business accounts could be two to three times as profitable as consumer accounts.

Bankers and nonbank lenders have long known that small business lending can be a strong, profitable anchor from which to secure more of a borrower's business. However, until now, the process of developing leads, completing applications, accessing credit bureau reports, and performing other due diligence for loan applications, such as underwriting, pricing, and decision-making, was time-consuming, expensive, and not always that profitable.

TowerGroup analyst Regan Wong observed in a recent American Banker article that the cumbersome nature of small business lending is expected to drive demand for the much simpler online application process. "Small business loans," Wong predicted, "may even become a commodity."

Though it may yet be early to confer commodity status on such loans, National Penn's Internet-based ASP technology small business lending solution is the much simpler online application process …