Small and mid-sized banks are facing rising competition from fintechs and institutional lenders who are already automating their processes. This is especially relevant for lenders underwriting commercial real estate (CRE) loans, which are a vital source of capital for business and economic development. 

CRE lending solutions fund a variety of property types and real estate investments, but these loans can be complex. Bank staff often feel overwhelmed with manual, paper-heavy steps that delay approvals and frustrate borrowers.

This is where automation can set the stage for your bank's success.

By automating key pieces of the CRE loan process, from application intake to underwriting, compliance, and closing, smaller banks can efficiently manage costs, speed up approvals, and compete in an evolving market. 

We'll explain the benefits of automating CRE lending solutions and how technology, such as artificial intelligence, is changing the lending landscape for the better.

What is a CRE loan?

A CRE loan is a commercial financing instrument used to buy, build, or refinance properties that produce income. CRE loans are different from residential mortgage financing because they’re intended for businesses and investors. Typically, the property is used as collateral. 

Some common forms of commercial properties include: 

  • Office buildings
  • Retail outlets and shopping centers 
  • Multi-family housing and apartment buildings
  • Warehouses and industrial space
  • Hotels and hospitality
  • Medical facilities

CRE loan amounts are typically much larger than home loans and have more complex underwriting rules. Lenders evaluate many factors before approving CRE financing, including the borrower’s business finances and creditworthiness, the property, cash flow, and market influences. 

Commercial real estate financing usually yields a significant contribution to smaller and regional banks' lending portfolios. CRE loans also involve high levels of documentation, due diligence, and regulatory requirements. Risk management is critical due to the high value of assets involved in CRE lending solutions.

Without automation, CRE loans often take weeks, or even months, to close. This is why, as the lending industry becomes more competitive, many commercial banking institutions are seeking faster and more streamlined ways to process CRE loans.

The CRE Loan Market

The commercial real estate loan market is worth nearly $500 billion, according to the Mortgage Bankers Association (MBA). Deloitte research shows that new CRE loan volumes increased 13% at the beginning of 2025, a growth of more than 90% compared to 2024. With a recent FED rate cut and more anticipated, the CRE lending market could be primed for more growth. 

The majority of commercial lending activity has been driven by multi-family housing, according to Reggie Booker, the MBA’s Associate Vice President of Commercial Real Estate Research. 

A surge in CRE refinancing is expected due to falling interest rates and an estimated $957 billion in CRE loans maturing throughout 2025, with another $1.5 trillion expected to mature in 2026. Demand for new capital is also a driver of new commercial mortgage loans.

To address increasing demand, more small and regional banks are exploring how they can meet the needs of today's SME's by improving how they originate, underwrite, and service commercial real estate loans. 

Forward-thinking financial institutions are adopting sophisticated CRE lending solutions like Biz2X that leverage automation and data to streamline operations, make more informed loan decisions, and manage risk.

Common Gaps Banks Face When Automating the Commercial Real Estate Loan Process

Many small and regional banks can experience significant barriers to automating their commercial real estate lending processes, including:

Outdated Infrastructure

Obsolete infrastructure is one of the biggest obstacles for banks adopting automation for their CRE lending solutions. Older core systems aren't always compatible with more modern digital technologies. This can lead to siloed data that's inaccessible, hindering visibility into borrower profiles or portfolio risk.

Slow, Manual Processes

Many banks still use manual workflows for underwriting, document collection, and risk assessment. These add operational burdens, costs, and extend turnaround times.

Regulatory Compliance

Compliance is another issue financial institutions must contend with. CRE lending is burdened with many local and national regulations. Banks often have systems that are unable to adapt to shifting requirements without human intervention.

Insufficient Data

Without real-time data or centralized dashboards, loan officers may make decisions based on outdated or missing data. 

Lack of Scalability

Legacy systems limit growth and make it hard to compete against fintechs and major financial institutions.

7 Stages of the CRE Loan Process That Benefit From Automation

Automation can greatly improve efficiency, accuracy, and scalability for CRE lending solutions. Reduced manual input and streamlined complex workflows can slash processing time, improve borrower experience, and facilitate better risk management.

Here are seven essential phases of the CRE loan life cycle where automation creates valuable efficiencies. 

1. Pre-Qualification & Application Intake 

The lending process usually begins with the collection of extensive basic borrower information. This stage of the loan origination process is cumbersome, with comprehensive paperwork, documentation, and many follow-ups. 

  • Application Intake: Automated CRE lending solutions have digital loan portals for applicants to submit applications and supporting documents online, facilitating a more seamless applicant experience.
  • Document checks: Automation tools check documents uploaded by borrowers in real-time and assess completeness and compliance. 
  • Pre-screening: Borrowers are screened in advance against bank lending criteria. This expedites the underwriting process and can help banks identify borrowers who are less likely to be eligible for credit approval. 

2. Document Management 

CRE lending solutions require heavy documentation, which slows down manual processes. Automation simplifies and speeds up this stage.

  • Digital document intake: Automated systems digitize and organize tax returns, appraisals, leases, ownership records, and borrower applications and documents.
  • Smart data extraction: Machine learning and Natural Language Processing (NLP) extract key data points and automatically verify borrower and property details.

3. Underwriting and Risk Assessment

Underwriting and risk assessment are critical steps in the CRE loan process. While human judgment is still important, automation can streamline key tasks and speed up decisions.

  • Eligibility: Automated CRE lending solutions use rule-based engines to gather financial data and credit scores from multiple sources to quickly evaluate whether a borrower meets basic eligibility requirements. This results in less manual work and turnaround time. 
  • Financial analysis: AI systems examine borrowers’ financials, cash flow trends, and property information to determine possible risks. The systems also use predictive modeling to provide underwriters with a more comprehensive view of borrower creditworthiness and risk. Together, these also help lenders arrive at loan terms, such as interest rate and down payment requirements.
  • AI-Powered insights: AI models can identify potential risk factors, such as declining occupancy rates or inconsistent rental history, that may not be apparent at first glance. This improves underwriting risk evaluation. 

4. Property Appraisal and Evaluation

Commercial property appraisal and evaluation have historically been one of the most lengthy and error-prone stages of the CRE loan process. 

The traditional method of appraising and evaluating commercial property involves an extensive manual collection of information and visits to the property. Automated CRE lending solutions use APIs and integrate with Automated Valuation Models (AVMs) and real-time data sources to evaluate property values.

  • Property Comparisons: Automated CRE lending solutions select comparative properties based on current sales and lease data derived from public and proprietary sources. 
  • Market trends: Data assesses local vacancy rates, rental trends, and development activities. 
  • Cap rate benchmarks: Automation calculates cap rates against local averages for better property valuation. 

5. Compliance & Regulatory Checks

One of the most resource-heavy components of CRE lending solutions is meeting compliance. Compliance rules are continually evolving, and regulatory scrutiny is ever-present. Your bank needs reliable systems that will help manage this complexity with minimal manual effort. 

  • Anti-Money Laundering (AML) checks: Automated CRE lending solutions perform AML checks to screen borrowers against sanction lists and patterns of suspicious activity.
  • Know Your Customer (KYC) processes: KYC processes use integrated data sources to confirm the identity and legitimacy of the business.
  • Digital Audit Trails: Automated systems automatically log every click and data point. This makes regulatory reporting more efficient and less prone to mistakes.

6. Loan Approval and Closing

The last step of the commercial real estate loan process often has the highest bottlenecks, frustrating borrowers and lenders alike. By building automated capabilities, banks can reduce the time to close and more efficiently accommodate the expectations of today's digital-first borrowers.

  • Automated decision-routing: Automated CRE lending solutions leverage AI-driven risk scoring models to route applications to specific decision-makers or workflows based on their risk level.
  • Auto-generation of loan documents: Automated systems generate compliant loan documents based on loan terms after approval. This removes the need for manual entry and generally eliminates errors.
  • E-Signatures & digital closing: Lenders can securely review and sign documents online, anytime. This speeds up closing and increases borrower satisfaction.

7. Post-Loan Servicing

Proactive post-loan servicing is essential for maintaining loan health.

  • Automated payment tracking: Automation monitors payments, flags delinquencies, and generates reminders without manual input. This allows lenders to step in early and avoid a potential default.
  • Ongoing risk monitoring: AI detects changes in borrower behavior or property performance that could signal an emerging risk.

Conclusion

CRE lending solutions are becoming more complex in a competitive commercial mortgage market, especially as borrower expectations shift toward faster, digital-first experiences. For smaller and regional banks, automation has become a necessity to stay relevant. 

Automation can help your financial institution streamline everything from intake and underwriting to compliance and servicing, reducing the time to decisioning and loan closing, lowering costs, and delivering a smoother process for both bank staff and borrowers.

As the CRE market continues to grow and evolve, banks that invest in modern CRE lending solutions will be better positioned to keep pace with demand, manage risk, and stay competitive in a rapidly changing landscape.

FAQs About Automated CRE Lending Solutions

1. Can automation help with other business loans besides CRE lending solutions?

Automation is being used for other commercial financing solutions, such as term loans, business lines of credit, SBA loans, business credit cards, and embedded finance.

2. How does automation improve the commercial real estate loan experience?

Automation has many benefits for borrowers and banks. For borrowers, the right automated platform streamlines the loan application process and leads to faster loan decisions. For banks, it streamlines complex workflows, improves operational efficiency and underwriting accuracy, enhances decision-making, and ensures regulatory compliance. 

3. Can smaller community banks adopt automated solutions for their CRE loans?

Yes, automated technology is perfect for smaller banks with limited resources. Best of all, it is customizable to meet individual bank needs and provides scalability so your bank can take on more loans without additional staff or increasing risk exposure.

4. What are the risks of smaller banks not automating the CRE loan process?

Banks without automation have more challenges in competing with fintechs and larger institutions. More borrowers are prioritizing digital solutions, so they’ll look for lenders who provide them. Without automation, it takes longer to close loans, and your bank will incur higher operational costs. But the biggest risks are borrower dissatisfaction and lost revenue opportunities.

5. How long does it take to implement automated CRE lending solutions in a bank’s current system?

It depends on which CRE lending platform you choose. While most providers take months for a full deployment, Biz2X can usually get a platform running to meet your bank’s unique needs and integrated into its core systems within 45 days. 

Book a demo with Biz2X to discover what its automated CRE lending system can do for your bank.