Monday, March 10, 2008

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Former executive banks on his new software
LendingCycle tracks loan process from start to finish

By Bill Wolfe
bwolfe@courier-journal.com
The Courier-Journal

As a former banking executive, John Jackson saw firsthand the problems that financial institutions have tracking and managing loans from application through closing. Often it's done manually, Jackson said, with front-line loan officers sending e-mail reports to supervisors, who would then spend the day piecing together the parts of a financial jigsaw puzzle.

What bankers could use, Jackson figured, was a computer system that could bring all the financial facts to their fingertips, following every step of the lending process and generating detailed updates. They needed a daily report rich with charts and graphs and alerts showing how many applications were being considered, where they were in the lending process, what paperwork was still missing and how much money would be needed in the coming days for closing.

Jackson could envision such a program, but there was one problem: He didn't know how to create it. "I wasn't a programmer. I was a bank guy," he said.

Jackson first took his idea to software engineers, but they said it would take up to five years to create the program. Then he took a different tack: Over the next 12 months, "I went to classes, read books, and trained myself to be a commercial programmer."

In December, three years after launching his effort, Jackson released LendingCycle, a Web-based loan-tracking service that is already making waves.

On Jan. 11, Jackson's new company secured its first contract -- with Community First Bank, based in Harrison, Ark. -- and Jackson said he expects to have three more deals signed by the end of this month.

"We just rolled out the product," said Dave Morton, chief executive of the Arkansas bank, which has 20,000 accounts, four locations and 170 employees. "We think it's going to be an excellent tool."

Technology like LendingCycle can "save everybody a lot of time," Morton said. "Eventually, I think it will be very useful to our organization and something that'll become just a routine -- like signing onto your computer in the morning and signing onto your e-mail. That'll be the first thing you do, go to your pipeline reports" on loan activity.

Jackson, who had been executive vice president of First Bank in Louisville before taking a job with a startup virtual reality software company, admits he didn't know exactly what he was getting himself into when he began developing LendingCycle.

He had always loved technology and thought he could master programming in three to six months. But it was "harder than I thought it was going to be, he said. "I have unbelievable respect for people who are commercial programmers, because it is tough. I mean, it is not an easy discipline."

"Three months into it I thought I was crazy," he said. "I really did think that, man, it was a high-minded idea, but maybe I made a bad choice here."

Fortunately, people in Louisville's tech community provided lots of help, asking nothing in return, he said. "I think once I got rolling on it, they were surprised at how diligent I was in not giving up."

Jackson's quest meant sacrifices from his family. His children, Blake, Kate and David, now 13, 10 and 4, respectively, were warned that they would have to give up vacations and other leisure activities for a while, "just because we can't afford it. We can run up to grandma's and see her in Indiana."

Jackson gave up coaching his children's sports teams. "But every night I made a point, since I started this, to stop working at 6:30 and then I start again at 9:30 once everybody's in bed, so that we have that time."

His wife, April Jackson, saw her home's formal dining room converted to a tech center, with computer servers and stacks of software boxes lining a table.

Money was always tight, but Jackson said he resisted looking for investors early on because he didn't want partners pressing him to bring the product to market before he thought it was ready -- something "which happens a lot, and I saw happen when I was at the banks," he said. "We probably sometimes pushed people."

The finished product is run not out of his dining-room tech center, but on servers in Indianapolis. It's available by subscription for a monthly fee. That's a pleasant surprise to companies that are "used to paying a big setup fee at the beginning," followed by charges for quarterly or annual updates, Jackson said. With LendingCycle, there are no setup fees, and users never pay more than $69 a month per user, he said.

The system is designed to be quick and easy, Jackson said, with most functions "available in one or two clicks."

So far, Jackson said, he hasn't tried to sell his service in Louisville. When a startup goes to hometown customers it's assumed, "Well, they don't have enough money or resources or ability to get out to people outside of Louisville," Jackson said. He wants to come back to Louisville's financial institutions when he can say he is already doing business with banks in Arkansas, Tennessee and Indiana. "That makes the conversation a lot easier."

While LendingCycle was designed with banks in mind, the core of the software can be adapted for other businesses, Jackson said. With that in mind, he has registered 97 Web site names such as DayCycle.com, for day traders, AgentCycle.com, for real estate agents and BrokerCycle.com, for mortgage brokers. For now, however, the company remains focused on banks, Jackson said.

"You never know when you get into something like this how it's going to turn out," he said. "And to take three years to build it, not knowing for sure whether the market will receive it or investors will either, and to have it work out as well as it has so far has been fantastic."

"I wake up every morning and can't wait to get at it," he said. "I'm happy I was able to stick to it."

Reporter Bill Wolfe can be reached at (502) 582-4248.

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