UK-based OakNorth Bank has partnered with Modern Bank, a full-service commercial bank based in New York City (NYC) to support US businesses amid the coronavirus (Covid-19) outbreak.
Modern Bank will provide up to $10m in loans to businesses with less than 500 employees as part of the Paycheck Protection Program (PPP) of CARES Act.
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The loan will help businesses cover payroll costs, mortgage interests, rent, and expenses on utilities.
Banks are expected to witness a steep influx of applications as hundreds of thousands of businesses rush to apply for the funding lifeline.
Modern Bank founder Bippy Siegal said: “Working closely with our partners at OakNorth, we were able to move quickly to put in place the solution in alignment with our institutional mission: to deliver superior products and services that empower our clients to achieve their individual financial goals – for their businesses, for their family, and for themselves.”
OakNorth provides partner banks with the insights required to profitably lend to businesses that need it the most.
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By GlobalDataOakNorth’s online workflow will help Modern Bank pre-screen the applications and streamline the document collection and end-to-end processes.
The cloud-based platform will enable the bank to fast-track the onboarding of borrowers while letting the bank retain control of key decision-making and risk management processes.
These processes include loan eligibility, authentication criteria and checks, compliance review, the credit decision, and the forgiveness eligibility and approval.
OakNorth co-founder Rishi Khosla said: “As we’ve seen with similar loan programs around the world, banks are experiencing call centre and web traffic that’s up to 50 times the normal levels and are simply unequipped to deal with this level of volume.
“The operational efficiency gains our solution provides will enable lenders such as Modern Bank to effectively manage this increase in demand.”
Last week, Customers Bank also selected OakNorth to identify weak spots in the loan portfolio.
