Overview

Lendfoundry LMS is designed to work with any Loan Origination System (LOS). The delineation between LOS and LMS is at funding. Once an application has been funded or ready to fund it becomes a loan and becomes available in the LMS. The decision to fund a loan or a draw is a part of the LOS, where the underwriter resides as a User. Similarly, all rules, integrations, and workflows related to verification, and escalation are also part of the LOS. The LMS is designed to be a record system for all loans, by creating repayment schedules, tracking scheduled and ad-hoc payments and allocating repayments, keeping a check, and tracking delinquencies and closures. The LMS is designed to work for multiple lenders and is a multi-product platform. It also supports various types of amortization methods with different flexibilities.

Micro-services Architecture

LMS is built on a micro-services architecture where there are different dedicated services designed for each task. This makes the system highly configurable and troubleshoot-friendly. At present, the initial configuration set-up is done by the Lendfoundry team.

Supported Asset Classes

LendFoundry LMS is a multi-product servicing platform. LendFoundry supports unsecured/secured term loans with different schedule types, Cash Advances, LOCs, etc. All products that a lender offers can be made available on the same LMS portal. A borrower may have multiple loans and such a consolidated borrower view is also available to manage borrower-level risk exposure. The products presently available on our system are

A. Merchant Cash Advances (MCA)-Factor Based

Cash Advances are those loans, which have a fixed repayment amount, irrespective of being early or late. These are factor-based, meaning if an advance has been made for 10,000 for a year, at a factor rate of 1.14, repayable on a monthly basis, then the repayment amount is 1,14000, repayable in 12 monthly installments. These installments are then allocated by the system into Principal and Finance Charge using the same factor rate. Hence the split of Principal and Finance Charge remains the same. MCAs can also be amortized in a different way which we call as a Reducing Balance MCA. Details are in the section.

B. Term Loans

Term Loans are those that carry a fixed tenure, rate, and principal amount, where interest is payable at regular intervals, with or without Principal repayments. Interest is accrued daily on the unpaid principal balance. The interest rate can be fixed or variable. Each payment is allocated to the Principal and interest based on the accrued interest for the period. Alternate allocation is possible through various Payment Hierarchies that are configured as per the Tenant.

C. Line of Credit (LOC)

A LOC is an interest-bearing loan that allows the borrower to draw funds multiple times during the life of the loan. Based on a line limit an underwriter may choose to approve funding of additional draws. The schedule type of these loans is typically interest only and one balloon repayment on the maturity date, but a few can also have equated repayments(Principal+Interest). Interest is accrued daily on the unpaid principal. More details about this are explained here.

D. Supply Chain Financing (SCF)

An SCF loan is a non-revolving term loan that can have multiple invoices associated with a single borrower, repayable at different rates, and tenures. Each invoice is onboarded as a separate loan. More details about this are explained here. In an accrual type of loan (such as Term Loans, LoC, SCF) each additional day that the principal remains unpaid, interest will continue to accrue. In the case of MCA loans, there is no additional interest. The repayable amount remains the same, irrespective of any changes in time taken to repay – other than any fees which may be levied for delays. Once a loan has been onboarded with a certain type, it cannot be changed.

Customer Service

‘Customers First’, therefore it is important to be able to handle all customer queries at the touch of a button. Be it - account statements, requests for pre-payment, pay-off letter, re-scheduling, early closures, changes in borrower information, or requesting a new draw (with or without underwriting intervention), it can all be handled here. Lendfoundry believes in complete transparency, as a result, information is available to the borrower at all times and the need to reach out to a lender is only on an exceptional basis. Staying true to this belief, Lendfoundry has a fully functional self-serve borrower portal, where most of the communication and information is made available to the borrower. If there are regular communications needed outside the portal via emails, or phone messages, these can be accomplished using 3rd party APIs. A list of these APIs is available upon request.