Webster Bank is touting a new program, “Fast Track,” a loan service for small-business owners that has cut the average wait time for approval from about 60 days to an average of 15 days — and sometimes 24 hours — for loans of $100,000 or less.
“We’ve had a great response,” said John Guy, executive vice president and director of business banking at Webster Bank headquarters in Waterbury. “There’s a lot of buzz within the industry about our customers’ ability to get their loans approved in such a short time.”
In the first five months of the Fast Track program, Guy said that Webster Bank funded $10 million worth of loans in such fields as legal, real estate and financial services, with an average loan size of $45,000.
Driving Fast Track’s launch was a combination of internal research and customer surveys finding that, regardless of the size of a given company or loan, the period between a customer signing a loan and receiving the money was taking more than two months’ time. The bank maintains that small businesses sometimes have to suspend operations during that waiting period.
As a community bank, Webster — with branches throughout Connecticut and New York’s Westchester County, as well as in Massachusetts and Rhode Island — takes the position that it is more approachable to individual customers and more adept at working with them than are larger financial institutions — a claim with which Fast Track customer Michael Negri agrees.
“I’ve had dealings with Bank of America, Wells Fargo and Citibank,” said Negri, owner of Choice Paper Group in Larchmont in Westchester County. Having once spent nine months waiting to get refinancing at one of the big banks, he said that he happened to be driving past a Webster branch with a sign promoting its friendliness to small businesses and entrepreneurs and decided to go in.
“I discussed what I was looking for in detail and what they could provide me,” said Negri. His company deals primarily in copy paper, “a very capital-intensive business. I buy from paper mills large overseas containers that cost $20,000 a unit. If I’m going through 30 to 40 units per month, capital is a very important ingredient.”
Completing the paperwork — which Guy said has been streamlined from an application of as much as five pages to two — on a Friday, Negri was approved for a $100,000 line of credit the following Monday.
“I plan on moving more of my assets to Webster and am hopeful that I can reapply for additional credit lines in the future and give them more business,” he said.
Guy said the bank has already seen Fast Track pay for itself in such a way. “We have seen a significant reduction in withdrawals” by small businesses looking to remain liquid during the loan approval process, he said. “We want to prove to them that there’s no need for them to shop elsewhere.”
To further ensure a quick turnaround, Guy said the bank no longer sends employees to its customers’ properties to assess the potential loan size, but does so only after a decision has been made on the line of credit. That usually happens within 24 hours of the original inquiry, thanks in part to an “auto-decisioning” process that is accessible online.
The banker said plans are afoot to make Fast Track available to all Webster customers seeking loans, including those for above $100,000, by the end of this year.
“This is the beginning of a new era,” said Guy, “one that’s much more efficient and customer-friendly.”