How a Secretary of State API Delivers Real-Time Status Checks

Manual verification processes are time-consuming, error-prone, and expose lenders to unnecessary risk. The Secretary of State (SOS) API offers a modern solution by providing instant access to primary-source business data, streamlining operations, and enhancing risk management.

Business Impact & ROI

Quantifiable Time/Cost Savings from Automation:

• Reduced Verification Time

Cobalt's API can reduce verification time by 90%, from minutes to seconds. Manual lookups that take 3-5 minutes can be completed in mere seconds with API automation.

• Increased Application Processing Capacity

Lenders can process 500% more applications with the same staff by automating verification steps. This allows for scaling operations without proportional increases in labor costs.

• Labor Cost Reduction

By automating the manual search and data entry tasks, staff can be redirected to higher-value activities such as complex underwriting and customer relationship management. 1West's CEO noted that Cobalt's API freed up a ton of bandwidth for their processing team.

Risk Reduction Metrics:

• Fraud Reduction

Real-time verification helps identify suspicious applications earlier, cutting fraud losses. Identifying mismatched business information or inactive statuses early in the process prevents wasted effort on potentially problematic files.

• Improved Approval Rates

By accurately identifying qualified applicants, lenders can increase approval rates for deserving businesses. Verified SOS data helps borrowers access more competitive offers and qualify for lenders who would otherwise decline them.

• Enhanced Compliance

Automated documentation and timestamped screenshots create audit-ready documentation automatically. This ensures compliance with Know Your Business (KYB) requirements.

Expected Implementation Timeline and Resource Requirements:

• Quick Integration

Most lenders can fully integrate Cobalt's APIs within days. 1West's CTO described the integration process as very easy, with simple and intuitive data structures. Idea Financial reported Cobalt API integration was "one of the faster integrations" they've completed.

• Minimal IT Resources

The Cobalt Intelligence API is designed for straightforward implementation. 1West's engineer was able to implement the API by simply reading the documentation.

• Flexible Implementation Options

Cobalt offers flexible implementation options with callback URLs and a responsive support team for implementation assistance.

Data Accuracy & Coverage

Live vs. Database Search Accuracy Rates:

• Real-Time Data Access

Cobalt Intelligence connects directly to Secretary of State databases in real-time, ensuring the most current information possible. This mitigates the risk of relying on outdated information.

• Primary-Source Confidence

Data comes directly from state registries, providing verifiable audit trails with timestamps and watermarks. Cobalt captures screenshots of official records with timestamps for audit trails.

• High Match Rate

1West reported over 90% successful match rate when pulling business information from SOS databases.

• Cached Data as Backup

For 70-80% of businesses, Cobalt maintains a cache updated monthly to ensure there is backup data available in case the primary source is temporarily unavailable.

Cross-State Consistency Solutions:

• Standardized Data

Cobalt delivers normalized data across all states for consistent processing.

• Comprehensive Coverage

Cobalt provides access to business data across all 50 states and D.C.. This eliminates the need to navigate different state websites manually.

• Multi-State Verification

With a single API call, lenders can verify a business across all 51 jurisdictions simultaneously.

Coverage of Newly Registered Businesses:

• Verify Recent Registrations

Cobalt can verify businesses registered as recently as an hour ago. This is crucial for assessing recently registered businesses or entities whose status has recently changed.

• Reduce Risk

Access to real-time data reduces the risk of funding non-existent businesses.

Practical Performance

• Latency Benchmarks by State:
  
  • The speed of data retrieval can vary depending on the specific state's website.
• Workarounds for Slow-Responding Sources:
  
  • Cache-First Approach

Use a cache-first approach with the LiveData=false parameter for the fastest response times.

• Callback URL Functionality

Implement callback URLs for asynchronous processing of longer requests. This allows the system to continue processing other tasks while waiting for the data to be retrieved.

• Error Handling and Fallback Options:
  
  • Cached Data 

Cobalt maintains a cache of business data that is updated monthly. This cache serves as a backup in case the real-time data retrieval fails.

• Retry Mechanism

If the initial API call does not return an instant response, a retry mechanism can be implemented to repost the request.

Fraud Detection & Compliance

• Identifying Discrepancies Between Filings:
  
  • Early Fraud Detection

Verify business legitimacy at the beginning of the underwriting process. Confirm business tax ID numbers match registered information.

• Mismatched Information

Identify mismatched information before investing significant time in review. Verify business officer information to detect mismatches.

• Red Flag Automation:
  
  • Status Alerts

Immediately identify inactive status or administrative dissolution. Flag inactive business statuses.

• Legal Issues

Access critical court records for key jurisdictions to identify current and historical judgments.

• Audit Trail Capabilities:
  
  • Screenshots and Source Documents

Obtain screenshots of official records with timestamps for audit trails. Create a verifiable audit trail with screenshots and source documents.

• Primary Source Documentation

Cobalt offers the unique ability to obtain primary source documents and screenshots with timestamps, which is particularly valuable for underwriters who need verifiable audit trails.

• Regulatory Compliance Documentation:
  
  • By providing instant access to primary-source Secretary of State data, lenders can maintain rigorous underwriting standards. Cobalt’s features help lenders meet KYB (Know Your Business) requirements with verified tax ID matching.

Integration Capabilities

• CRM/LOS Integration Specifics:
  
  • Seamless API Integration: Cobalt’s APIs integrate seamlessly with existing systems.
  • REST API: Cobalt utilizes a REST API with straightforward documentation.
• API Webhooks for Automatic Triggers:
  
  • Callback URL: Implement callback URLs for asynchronous processing.
• Document Processing Workflows:
  
  • Automated Documentation: Screenshots and documentation are automatically captured.

Cost Structure & Scaling

• Credit Usage Optimization:
  
  • Full Verification: Each full business verification (checking all states) uses 3 credits.
  • Cached Database: Use livedata=false to check the cached database first (70-80% coverage).
• Volume Pricing Considerations:
  
  • Volume Discounts: Volume-based pricing tiers are available. As your verification needs grow, your per-lookup cost decreases.
• ROI Calculation Examples:
  
  • By reducing verification time by 90% and processing 500% more applications with the same staff, lenders can achieve significant cost savings and revenue growth. The specific ROI will depend on the lender's current verification costs, application volume, and loan portfolio performance.

‍

By implementing Cobalt Intelligence's API solutions, lenders can transform their business verification process from a bottleneck into a competitive advantage. This results in faster decisions, reduced fraud risk, and improved operational efficiency.

Stay ahead with top alternative finance news—straight to your inbox.