Why real-time reporting is now table stakes for lower middle market lenders, and what it actually protects
Why real-time reporting is now table stakes for lower middle market lenders, and what it actually protects
By Alyssa Coiley
6 min read
The morning of our first draw, it took two and a half hours to complete a single borrowing base calculation, less than a week after we stood up our first credit line. We had the data we needed but it was all in random spreadsheets across the network, four different databases and hidden in a deal team member’s files. When I finally reviewed the custody report against our own records, nothing tied. Nothing. That was the moment I knew the status quo had to change.
What 90 days used to mean
For years, the back office had a cushion. A transaction that happened at the start of a quarter did not need to hit our systems of record until quarter-end. Ninety days to enter, reconcile, and report. It was never written policy, just the pace the business allowed.
That cushion is gone. With new fund vehicles, new credit facilities, and the new covenants that come with them now in place, every transaction has to be entered in real time, or we are already behind on our reporting obligations. Having the data we need immediately is no longer a nice-to-have — it’s a requirement.
What had to change
What is clear is that our processes need to change so that our transaction data is entered into the right systems and shared with our partners in as close to real time as possible. We used to be able to wait on cap tables and legal documents until quarter-end; now they need to reach us the day a deal closes, even better, the day before. The same discipline has to extend across our other systems of record — the fund administrator portal, the loan administration system, and our portfolio management system — so nothing sits waiting for a monthly catch-up. It is a shift in mindset and process, one that will be faster and easier with technology and AI.
The initiatives underway
Our first initiative is to work with the deal team to make sure that the data we need right away is embedded into the close process. The near-term goal is to shift some of the administrative burden off the investment team by providing a dedicated team to move documents forward through the process and track them in real time. The longer-term goal will be to move most of the back-and-forth to AI, with a real-time checklist available on demand.
Our next initiative is working with our internal AI team to build API connections across our bank accounts, our fund administrator portal, our loan administration system, and our portfolio management system, so reports can auto-populate with real-time, vetted data instead of being stitched together by hand. We’ve also been leveraging Claude to build analytical tools that sit on top of that data, helping us make better decisions in real time.
Where the bottlenecks actually broke
As we realized that every timetable had to be accelerated, we’ve been relentlessly searching for ways to increase efficiency, even in the small areas. Those smaller wins have added up, giving us the time to manage 24% YOY growth without a 24% increase in resources.
We’ve created a document library in Claude to answer questions and interact with our legal documents. Synthesizing information across legal entities and across deals is now a task that takes minutes instead of hours. Our AI team also built a tool that sweeps our loan operations inbox overnight and automatically saves every loan notice under the correct naming convention — a task that used to eat three tedious hours of our quarter, done entirely by hand. None of these changes are dramatic on their own, but stacked on top of each other, they’re the difference between an operations team that reacts and one that keeps pace.
The foundation was already there
None of this works without a real system of record. We implemented our current loan administration system in late 2024 and our current portfolio management system shortly after. Before that, every loan lived in Excel, which was slow, error-prone, and incapable of producing the reports our growth now demands. Having that data in a single database has been one of the biggest drivers of efficiency.
Growth is the actual trigger
This isn’t a five-billion-dollar problem. At roughly a billion dollars in assets, a firm is already past the point where quarter-end reconciliation is acceptable. If you close on a $125 million leverage facility, raise a billion-dollar fund, and increase deal volume by over 50% in the first six months of the year, you will find out what your operations team is made of. The back office doesn’t get to decide when it’s ready — growth decides that, and the systems either hold up or they don’t.
What this actually protects
A loan that recently closed was fully entered into our system less than 24 hours after close. That’s an achievement that doesn’t necessarily put information in our LPs’ hands faster, but it does help ensure the data they do receive is accurate and consistent. It keeps us in good standing with our vendors and banking partners and in full compliance with our covenants. Real-time, accurate data isn’t a nice-to-have for the back office. It’s how we keep our word to the people who trusted us with capital.
The information contained herein is for informational purposes only and should not be construed as investment advice. The views expressed are those of the author as of the date of publication and are subject to change without notice. Past performance is not indicative of future results.
