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Welcome to the second edition of 'Leeway Insights,' specifically tailored to empower your Construction Progress Inspections. 

We hope you found the first edition insightful and are excited to read the second! Our goal is to keep you informed on how Leeway can enhance your progress inspection needs and give you tidbits about the industry. Your feedback is invaluable to us, so please don’t hesitate to share any topics you’d like us to cover or questions you may have about our content.

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The Leeway Inspections Team

When it comes to construction loan progress inspections, accuracy isn't just important—it's everything. At Leeway Inspections, we're committed to providing our clients with accurate and reliable information. We know that precise reporting isn't just a nice-to-have; it's essential for informed decision-making.

So, how do we ensure this level of accuracy? It all starts with our in-house experts, who meticulously review every inspection to ensure precision. We don't just glance over things; we dig deep to make sure every detail is on point. We're not about cutting corners; we're about getting it right, every time.

But accuracy is more than just getting the numbers right. It's about giving our clients the confidence to make the right decisions. That's why we're not afraid to pick up the phone and chat with contractors or loan servicers to clarify any questions before the report is submitted. We believe in working together to get things done right the first time.

Teamwork is key to our approach. We place a strong emphasis on collaborating with contractors because we believe that respect is a two-way street. By valuing their input, we ensure that our reports are not only accurate but also thorough.

At Leeway, we don't just stop at comparing progress with the request. We dive deep into every detail, providing insights that help our clients make better loan disbursement decisions. We look at everything from the project's footprint to the description of materials and other provided documentation, ensuring that everything is in line with the loan documents.

In the end, our goal is simple: to provide our clients with accurate reports that they can trust. By doing so, we help them make quick and confident loan disbursement decisions, leading to successful construction projects. Accuracy isn't just a goal for us; it's our commitment to excellence.

This appraisal’s amenities aren’t horsing around!

Small businesses are the backbone of the U.S. economy, and small banks, also known as community banks, play a crucial role in providing them with access to credit when starting and even growing their businesses. According to the U.S. Small Business Administration (SBA), a small business is defined as having fewer than 500 employees. With 33.2 million small businesses in the U.S., they employ roughly half of the American workforce. Community banks, as defined as banks with less than $10 billion in assets, make up the vast majority of banks in the U.S.

Small businesses often face obstacles when trying to secure loans due to their higher risk profiles. High failure rates, especially in the early stages, and their typically younger age make it harder to assess creditworthiness. The costs of processing smaller loans are higher, and lack of collateral further complicates lending.

Community banks are well-positioned to overcome these challenges. With deep local insights and strong relationships, they make informed lending decisions. In 2022, 82% of small-business applicants were approved for loans from small banks, compared to 68% at larger banks. Small businesses also report higher satisfaction rates with community banks.

Community banks are especially important for non-employer firms—businesses with no employees other than the owner. In 2022, 58% of these firms received loan approvals from small banks, compared to about a third from larger banks.

Community banks hold a higher ratio of small-business loans to total assets compared to larger banks. As of June 2023, small-business loans made up a significant portion of community banks' assets, highlighting their commitment to meeting the credit needs of small businesses.

It is clear that community banks are vital in supporting small businesses, driving local economies, and fostering financial inclusion. Their commitment to understanding and serving the unique needs of small businesses makes them indispensable in the U.S. financial landscape.

The Leeway Difference began even before Leeway Inspections was founded. It’s a story about a local banker who built an inspection company to serve other local bankers.

In the late 1980s, my friend Dennis Lee discovered his calling by chance. As a dedicated employee in the note department at Sacramento Savings and Loan, Dennis was immersed in real estate loans. His journey took an unexpected turn when an in-house inspector's mishap left the bank's construction loan department needing an interim inspector. Dennis stepped in, and it soon became clear he wasn’t just filling in; he was excelling.

Dennis’ unique ability to understand all parties involved made him invaluable. In no time, he led the inspection department, revered for his skill and insight. The acquisition of Sacramento Savings by First Interstate Bank marked a pivotal moment. As the larger bank phased out construction loans, they leaned on Dennis to manage and close out existing projects. This transition wasn’t just a job for Dennis; it was the birth of Leeway Inspections.

I joined Dennis in 1998, bringing my marketing experience as we embarked on a journey fueled by packed lunches and determination. Our mission was simple yet profound: understand and serve the unique needs of local banks like no one else.

Leeway Inspections blossomed in Northern California, quickly becoming the go-to inspection service, not because we were the largest or oldest, but because we understood something fundamental—what community banks truly need. Our approach wasn’t about ticking boxes; it was about providing the kind of service our client banks would provide if they had their own in-house inspection department. That has always been what makes Leeway different. We provide accurate progress inspection information banks need for risk management and personal service to build positive relationships among stakeholders and in the community.

As the Great Recession rose, many faltered, but Leeway Inspections found new horizons. Our reputation for thorough, bank-centric inspections reached banks in Oregon and Washington, facilitating growth during challenging times. Leeway's expertise became our passport, taking us from regional to national, one satisfied client at a time.

Today, Leeway Inspections is more than an inspection company; it's a partner to community banks across the United States. At Leeway, we don’t just offer inspections; we offer an understanding born from years working in and with the local banking industry itself. We know the landscape, we speak your language, and we anticipate your needs before they arise.

Choose Leeway Inspections. Because understanding your journey isn’t just our business—it’s our foundation since 1995. "It's Personal for Us, Too."

Artificial intelligence (AI) is making waves, not just in flashy customer-facing applications but significantly in back offices. Community banks are cautiously exploring AI’s potential, recognizing its profound impact on efficiency as well as compliance.

Generative AI tools offer numerous back-office benefits. For instance, they can summarize an employee’s workweek, highlighting pending tasks and suggesting key discussion points with supervisors. At Coastal Community Bank, AI helps employees understand policies and procedures through an AI-enabled search interface.

While AI’s presence in the back office may not make headlines, its impact can be substantial. Community bankers see AI as a vital solution to the skilled labor shortage and the pressure to maximize efficiency. AI tools can automate repetitive tasks, freeing employees to focus on higher-value activities.

Gilles Ubaghs of Datos Insights emphasizes a cautious approach, advocating for a “co-pilot” model where humans oversee AI’s work. This approach ensures it enhances rather than disrupts operations. Community banks want AI to assist without compromising the essential human touch.

Successful implementation of AI often begins with finding a technology champion. At Citizens Bank of Edmond, an 80-year-old switchboard operator embraced new technology, inspiring others to follow. Now, Citizens Bank uses AI to automate workflows, reduce errors, and improve fraud detection.

AI’s potential extends to streamlining processes like data extraction and loan origination. Todd Michaud of HuLoop Automation notes that AI can significantly reduce the time employees spend on mundane tasks. AI can also provide data-driven insights to optimize workflows and enhance productivity.

Charles Potts of ICBA highlights that AI has been integral to banking for decades, especially in fraud detection and credit scoring. The goal is not to replace employees, but to enable them to focus on more valuable tasks.

As AI and automation transforms community banking, the back office emerges as the true frontline of digital innovation. The key is balancing technology with the personal touch that defines community banking. AI is poised to revolutionize back-office operations, making banks more efficient and effective in serving their customers.

Leeway Insights Edited by Shelley Pratt

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