How project finance and loan servicing software can scale renewable energy

Climate tech and renewable energy have fundamentally altered the landscape of project finance. The large, billion-dollar loans of the past, once backed by months — or even years — of due diligence, have morphed into thousands of smaller financial products fueling the fast-growing sustainable infrastructure market. And with even more catalytic funding from both the public and private sectors flowing into this space, project finance is once again dividing, deploying capital to scores of small projects across the United States and around the world.

As this new financing enters the sustainable infrastructure market, private funds, green banks, and community lenders alike will be handling exponentially more loans — and require effective loan servicing and project finance operations to manage these transactions. Software solutions exist for each, serving different purposes in effective loan management but uniting to become greater than the sum of their parts.

Here’s how project finance software and loan servicing software can help your fund move quickly, deploy more capital, and stay on top of compliance across the entire loan lifecycle:

What is project finance software?

Project finance software is designed to streamline, accelerate, and standardize the deployment of capital. Banyan Infrastructure’s software platform, for instance, is built specifically for project finance professionals to manage the complex processes required to originate, manage, and report on complex project finance deals. Private renewable energy and sustainable infrastructure funds, green lending and community lending institutions, and banks are all examples of regular project finance software users.

To maximize the benefits of project finance software, users need data. Banyan Infrastructure’s cloud-based portal collects and organizes the loan and project data collected during loan origination and deal-making processes, creating one single source of truth for all stakeholders involved. This information can be pulled from a variety of sources, including software integrations across customer relationship management, accounting, asset management, and project management platforms. Once collected, this data provides stakeholders transparency and enhances collaboration so that project financiers and their counterparties can communicate clearly, accomplish tasks on time, and get deals structured and closed faster.

Project finance software can also provide valuable insights to risk, portfolio management, and executive teams based on the available data. Banyan Infrastructure can track project performance, monitor key metrics, and analyze information to identify and assess project risks faster and more accurately than manual analysis. Automated workflows and aggregated data help to provide automated one click reporting, manage audits, and facilitate compliance and obligation tracking, speeding up critical but time-consuming processes that can hamper the management of renewable energy projects.

What is loan servicing software?

Loan servicing software is designed to manage the processes that take place after a loan is closed and its funding is disbursed. This includes handling the ongoing administration of the loan, from processing payments to maintaining accurate loan balances, complying with regulatory requirements, and addressing any issues that arise with a loan after its terms have been set. Atmos Financial, Concord, Lendistry, and DownHome are all examples of this type of software specifically servicing loans in the sustainable infrastructure market.

As more capital is deployed toward distributed and residential renewable energy projects — particularly solar energy — loan servicing software will become critical for lenders handling a high volume of smaller loans. These financial products will scale rapidly in the coming year thanks to catalytic investment from federal programs such as Solar for All, and technology will play a key role in ensuring lenders can service them appropriately.

When do project financiers need loan servicing + project finance software? 

With this rise in catalytic capital — and growing demand for small-scale renewable energy financing — loan servicing software is finding more use cases in the sustainable infrastructure market. Solar for All financing deployed across all 50 states, for example, will increase the number of residential and small business loans dedicated to these types of projects — solar panels on multi-family housing, for example, or a heat pump for a local store. This technology is not simply a nice-to-have as more capital enters this market: Without a digital solution to support this growth, project financiers face a higher risk of error in loan servicing operations and a decline in efficiency as they struggle to keep up with volume.

Now is the time for these powerful digital tools — project finance software and loan servicing software — to come together. Lenders used to a lower volume of higher-value deals are gearing up for a new wave of customers. These funds and lenders will need the digital and operational infrastructure to support this transition. Banyan Infrastructure, complemented by loan servicing software, provides lenders with the opportunity to track deals from origination to close and compliance management to securitization. Its digital tools can track the origination, structuring and closing of these deals, while loan servicing software ensures those loans are correctly serviced according to terms.

To facilitate this collaboration, Banyan Infrastructure uses industry-standard APIs to enable a seamless, secure flow of information across both software platforms. This includes pulling data on loan payments, status updates, and key details into Banyan Infrastructure and sending relevant information to the integrated loan servicing software in compliance with data protection regulations. This information exchange eliminates the need for manual data entry and reconciliation, saving lenders and loan servicers valuable time, as well as ensuring access to accurate and timely information.

Banyan Infrastructure also tracks portfolio performance, allowing lenders to see how their loans roll up into a larger portfolio and perform over time, in addition to serving as a trusted single source of truth for performance and loan data. Finally, by funneling loan servicing information into Banyan Infrastructure’s platform, lenders can also meet the often heavy reporting and compliance requirements associated with more distributed and residential financing. 

Project financiers can try to manage loan origination, deal-making, and servicing on their own, but with greater volume comes more paperwork, more deadlines, and more responsibility. Don’t try to go it alone — talk to Banyan Infrastructure today to learn how project finance software can work with loan servicing technology to transform your lending operations.