GoDocs Adds Product for Automated C&I Loan Documents

GoDocs, which has software that it claims reduces the loan document process to “minutes,” announced a new version for commercial and industrial (C&I) loans, called C&IDocs.

Last summer the company was making the argument that document automation could increase efficiency in one part of the lending process and that could help close deals as rising interest rates would have an impact on multifamily in particular. It was still early in the Fed’s march of rate hikes. At this point, it isn’t clear that a somewhat faster loan process would add enough efficiency to be significant in the face of current financing costs and tightening lender requirements, including significantly reduced leverage.

That said, if document preparation could be handled faster without problems (not necessarily a given depending on the technology), it might help deals close faster, which can have strategic benefits.

Back in January 2023, GoDocs announced API capabilities. APIs, shorthand for application programmer interfaces, allow communications of data and function between the two programs or companies without duplicating capabilities.

The company says that the new C&IDocs is cloud based. “Customers can engage in the dynamic C&IDocs platform to create a range of capabilities, from easy to the most complex, to support their specific underwriting requirements, e.g., multiple collateral types, revolving or non-revolving lines of credit, and unique collateral monitoring customizations that include financial covenants for all loan parties, all without any outside legal support,” the company’s press release says. “Simply stated, customers can generate a sophisticated, 50-state compliant product that articulates their important decisions into attorney-powered documents.”

The loan types include term, line of credit, revolving line of credit, business line of credit, and interest-only bridge.

The approach does raise the question of what “attorney powered documents” means. It would seem unlikely that a practiced lender would not have a legal review of fundamental documents in a lending process. As the company’s site says, the software uses a “rule-based” technology that has “encapsulated 20 years of legal knowledge from several nationally prominent attorneys.” Rule-based systems are fine, but can have limitations, and given how lending practices and legal requirements can vary by state, it is unclear that talking to several attorneys would be enough to cover all potentially significant jurisdictional differences.

Where such a system could prove useful is in providing the base documentation, with attorney reviews to ensure they are adequate for the particular loan. And there still might be requested changes or corrections from a borrower’s attorneys.