How a B2B Retailer Instantly Approves 90% of its Online Credit Applications

Recently, BlueTarp partnered with a B2B retailer that was looking to gain an edge on its competition. Providing online applications with instant decisions proved to be a crucial step, leading to more and faster approvals, and ultimately boosting sales.

Automating credit approvals leads to more and faster sales

When BlueTarp started working with this B2B retailer, it focused on streamlining the credit application process. Instead of using a paper application, customers now fill out an online form that eliminates the chance of incomplete applications. The application asks for a digital signature, so the customer can agree to the terms without needing to print, sign and mail in the form. (With offline customers, the company’s sales team will complete the application for them.) Once an application is completed, it is immediately evaluated for the likelihood of severe delinquency or charge-offs, then placed in the appropriate risk category.

This automated process has meant that 90% of the leads sourced by the retailers’ outside sales reps are now instantly approved—and then presented with an immediately available credit line.

Online credit applications with immediate decisions can help you start off on the right foot with new customers. Buyers who are faced with a laborious credit application process that requires printing out a form, sending it in and waiting more than a day to hear back are likely to search for a supplier with a more streamlined process. That means you could be losing business—even if you provide a 24-hour turnaround on applications.

It’s no wonder that according to Credit Today’s recent benchmarking survey on process automation, the highest priority item to automate wasn’t month-end reporting and KPI dashboards, or even credit monitoring. It was automation of the credit application process.

 Why manual credit approvals are bad for business

Most retailers have a manual underwriting process for B2B customers, if they do credit screening at all. The customer fills out the form by hand and sends it to the credit department, where someone contacts a credit bureau, checks references and—using criteria that differs from business to business and may not accurately reflect creditworthiness—takes anywhere from a few hours to a few days to decide whether to grant the applicant credit, and how much.

What’s more, this process runs the risk that customers won’t fill out their applications correctly or completely—meaning your staff has to make follow-up calls that further delay both processing and the final credit decision. As a result, several days—or more—might pass before customers can start purchasing. With such a long decision period, many customers will move on to another business rather than waiting around to hear back from yours.

 Online applications are a win for you and your customers

The benefits of online applications with instant approvals to the customer are clear: more speed and greater convenience. But the benefits to your business are just as important. With fewer customers bypassing your company due to processing delays, you’ll establish a competitive advantage that attracts new customers and creates loyalty.

In addition, automated credit decisioning requires less manpower, which quickly translates into lower costs and improved efficiencies. Manually processing a few hundred applications a month can require at least two full-time staff members. Switching to automated decisioning frees up these employees for higher-value work, such as devoting more attention to high-risk accounts, or supporting your sales team’s efforts.

Online applications with instant decisions can also reduce friction between your credit and sales teams.  An automated process delivers decisions that are consistent and validated, preventing any delays or biases created by sales pressure. Both teams have access to a credit model that balances risk with new sales growth, and they both have full visibility into the status of all decisions.

Credit applications are one of your customers’ first points of contact with your business. They’re a gateway to all of their future interactions with you, from making purchases to paying bills and managing their accounts. That’s why it’s so important to get this step right. By allowing your customers to fill out an application online and get a decision right away, they can quickly move on to placing orders for the products they need.