KeySource Commercial Bank, a start-up in Durham, N.C., says it has gained a competitive edge in loan decisions and offers a distinctive service to its business customers — financial projections — by using software that analyzes diverse forms of data.
Since opening in March after raising $19 million of capital, KeySource has originated $20 million of loans, mostly to small businesses, real estate developers, and business professionals, Donald R. Draughon Jr., its president and chief executive, said in an interview this month.
"In a small-bank environment, I'm trying to do something that sets us apart," Mr. Draughon said.
The bank uses the ProfitCents software from Sageworks Inc. of Raleigh to help lending officers analyze loan applications more consistently, as in cases where a small business offers tax returns rather than financial statements prepared by an auditor, he said.
"It used to take a long time to analyze somebody who just used tax returns" in applying for a loan, Mr. Draughon said. "Now I can get them where they look like everybody else."
The software also let bankers make projections that they can share with borrowers, he said. "We can show small businesses the impact on their growth that a loan would have over the next couple of years."
The software will provide an incentive for the borrowers to provide financial updates to the bank, Mr. Draughon said, because Sageworks offers a shared database that allows owners of privately owned businesses to compare their results with others in their industry.
"Now there's an additional motivation for them to want to give us the information," he said.
