Equipment lenders turn to AI as originations, data volumes rise

Equipment lenders are using AI and automation to manage rising originations and data loads while tightening control over Uniform Commercial Code filings and lien portfolios. 

Equipment Leasing and Finance Association (ELFA) member companies reported $10.5 billion in seasonally adjusted new business volume in June, up 2.5% month over month. On a non-seasonally adjusted basis, volume rose 17.2% year over year, while first-half volume increased 11.3% year over year, according to ELFA’s latest CapEx Finance Index. 

More information improves decision-making but can burden finance teams. Equipment lenders and dealers with added information have “better visibility to the metrics that drive [their] business,” Lawrence Kunkel, vice president of inventory finance at Mitsubishi HC Capital America, told Equipment Finance News. 

“With all the data that’s available, sometimes [there’s] too much data at a certain point,” Kunkel said. 

To help navigate all that data, Wolters Kluwer has introduced new AI features in iLien – its lien lifecycle management solution – to help manage loan documents, prefill Uniform Commercial Code forms, flag missing information and analyze public records for borrower and collateral risks, Nasser Ansari, director of product management for Wolters Kluwer Lien Solutions, told EFN.  

Editor’s note: Wolters Kluwer does not publicly list pricing for iLien. 

“You don’t see the risk that’s hiding inside your portfolio,” he said. “AI can help a lot in terms of trying to match every aspect of your lien filings with the borrowers and the latest available information.” 

AI reduces manual work 

The filing assistant identifies debtor and secured-party information, collateral descriptions and jurisdiction details in loan documents, Ansari noted.

Lenders “still have the ability to correct and be the human in the loop, but it just cuts down a lot of that work,” he said.

Lenders also can use application programming interfaces to transfer data from a loan origination system or Salesforce into iLien with little human intervention, Ansari said.

Automation also helps lenders keep up with different state and local filing requirements. Wolters Kluwer works with jurisdictions to test website and data-feed changes, giving the company early visibility into updates, Ansari added. 

Accuracy is critical because a small filing error can jeopardize a lender’s security interest in high-value equipment, Ansari said. 

Monitoring extends beyond origination  

Borrowers with multiple business units, related entities or similar names create additional due diligence challenges, so Wolters Kluwer uses proprietary entity mapping to link businesses that have different names but share an ownership structure, Ansari added. 

Lenders also need to monitor continuation deadlines, borrower name changes, tax status, good standing and new liens after booking, Ansari said. 

They should conduct checks, “not just at the due diligence time, but throughout the process,” he said. “Keep an eye on that throughout the life cycle rather than just doing it at the upfront level.” 

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