Release Notes v.7.7 – Making End-to-End Lending Automation Easier Than Ever

2-level approval flow

In many business cases, lenders need to have a credit committee or several levels of loan approval in place. In v.7.7, this functionality is ready-to-use out of the box with flexible settings that can be enabled on a credit product level.

You can turn on and use the pre-configured Risk Evaluation Workplace which will receive the loan applications between Origination and Underwriting. Back-office users permitted to work in this workplace will analyze the application data and system decisions to make preliminary credit decisions.

Built-in scorecard editing

In addition to configuring your own credit scorecard, in v.7.7 we’ve added the option to edit the pre-configured AI-driven scorecard created by our team.
Navigate to Settings -> Decision Engine -> Scorecards and choose the scorecard you’d like to edit:

• Application Scorecard.
• Bank Statement Scorecard

You can see and edit the specific risk segments of the built-in scorecard, choose which criteria lead to approve, reject or refer decision, as well as edit the built-in texts for your staff to understand your internal terms better.

New calendar settings

Depending on the credit product, the audience, and the location served, you may need to charge installments just on the business days or regularly, regardless of the day of the week.

Starting with v.7.7, TurnKey Lender introduces a new version of the calendar which allows you to choose whether you’d like the System to take into account just the business days or all days in the calendar when building a schedule.

Multiple offers

In v.7.7, Underwriters can swiftly create several loan offers for each loan application. Separate loan offers are created by underwriters and can have completely different terms – more installments and fewer payments, the other way around, different credit products, etc. Plus, there can be as many offers as you’d like, based on the number set in the System Dashboard.

Loan offers are sent to the Borrower portal and the client can accept the one they prefer.

Once one of the offers is accepted – the selected data is communicated to the System, the loan agreement is generated and the loan begins its lifecycle.

Loan-level auto-charges configuration

We’re introducing a new level of flexibility when it comes to the configuration of payments’ auto-charges to allow creditors to show loyalty towards borrowers who may find themselves in strained circumstances because of the pandemic or some other reason.

Auto-charges used to be set on the System level – either on or off for all the loans within the solution. But from now on, auto-charges can be paused or stopped on the level of each individual loan. Each customer can even have different auto-charge settings for their different loans.   

Auto-charges disablement after multiple non-sufficient funds responses

To simplify local regulatory compliance, avoid unnecessary charges, and having to cancel accrued NSF fees, a lender can choose an option to disable auto-charges after an X number of non-sufficient funds responses.

Once the system receives several non-sufficient funds messages in a row from a borrower’s bank account, auto-charges can be automatically disabled until the back-office user turns them back on.

New and improved integrations

Clarity (Experian) integration

Clarity is a project by Experian that provides reliable borrower evaluation for immigrants, asylum seekers, and other people without an official credit history. The solution analyzes users’ bank accounts and provides informed credit decisions even without a credit history. If a lender has the Clarity product, TurnKey Lender will receive the analysis results and will use them in our own decision-making through meaningful integration with Experian’s new product.

New Plaid Assets Report

TurnKey Lender’s Plaid integration has been upgraded to be able to receive and analyze data from a new report type with a vast amount of new financial information – Assets Report.

Plaid is a provider of bank verification and bank statement scoring data and provides a number of products with different data points like accounts’ balances and transactions. But there’s one global product that includes all of the financial data in a single data package, called Assets. In it, we can receive all kinds of data like general info, current and historical balances, transactions, owners, etc in one package.

This way you, the lender, have to pay only for one Plaid data product.

In v.7.7, TurnKey Lender has learned to receive this report, parse it, and analyze it. We’ve also adjusted the decision rules to use the new data inputs.

You can retain to using just the transaction data, but this one is a lot more inclusive and provides a 360 view of the borrower’s financial standing and ability to repay your loan.

Extended list of business rules

To optimally use the new data points received in the Assets product through the Plaid integration we’ve implemented new decision rules which analyze the information and allow for even more accurate evaluation process. Of course, as always, these rules are fully configurable so you can tweak the automated decisioning to your needs.

Dwolla payment provider

Dwolla is a popular innovative payment provider and we’re glad to report that the integration with their service has been added to TurnKey Lender in v.7.7. Dwolla works only with verified bank accounts which is reflected in our system. But if a lender uses a Plaid integration too, and a bank account is verified there, additional verification in Dwolla won’t be required because we’ve connected the integrations with Plaid and Dwolla. So if you’re using both integrations, the borrower doesn’t have to verify their account twice.

Apply for financing without specifying terms

To make the previous feature even more useful, v.7.7 has an option to allow borrowers to apply for financing without specifying the loan terms (sum, term, etc). The underwriter then makes a decision on the financing and terms they can provide based on the borrower’s financials analysis.

This applies most to the Merchant Cash Advance businesses or to cases where the sum of the loan depends on the client’s ability to pay or other circumstances which influence the decision for the lender.

This flow can be enabled globally replacing the traditional loan application flow and removing unnecessary parts of the application process.

New system document –  Amortisation Schedule

Similar to loan statements, this is the document that can be generated at any point in the loan’s lifecycle and attached to a notification/reminder sent out to the borrower.This feature is most commonly used during the disbursement when a document with a schedule is attached to a notification sent to the client. You can add your own template to the system and the final schedule is exported into a document and sent out to the client on auto pilot.

Calculations’ Engine Updates

The new fundamental update of the Calculations Engine includes a lot of features ensuring unmatched flexibility, configurability, and usability when creating and customizing new credit products.

Merchant Cash Advance credit product available out-of-the-box

In v.7.7 we’re making the Merchant Cash Advance (MCA) calculations model available out of the box.

MCA is the calculations edition that can be enabled for our clients and allows working with a new type of credit product – advances. MCA edition includes new credit product type, new application details (company info, revenue, etc), adjusted application flow, new fee types, and open-ended MCA schedule.

See MCA Edition Release Notes

Open-ended loans

As we’ve mentioned before, TurnKey Lender has recently ventured into the Merchant Cash Advance space and in v.7.7 we’re introducing open-ended financing inspired by the MCA industry into the Box solution.

In regular credit products, each loan has a maturity date on the last due date in the schedule and if the client hasn’t paid until then, the loan goes into bad debt and needs to be collected manually. In some business cases, that’s not an optimal flow, so starting with v.7.7, lenders can offer loans without the maturity date, with a schedule that will be extended and borrowers being charged as long the outstanding balance isn’t zero.

In the new version of TurnKey Lender, lenders can choose out of two modes of schedule-building:

• Build full schedule in advance
• Generate next installments until the loan is repaid  (‘open-ended loan’)

The System will either build the full schedule until repayment in advance or add a date for each new installment after the last payment is made.

When the loan is disbursed, the borrower can see only the current and the upcoming installment. Which applies to MCAs and credit lines.

Initial schedule vs Actual schedule

Schedule changes are a common occurrence in the lending business’ operations, especially in today’s uncertain times. In TurnKey Lender v.7.7, we’ve implemented a feature that allows you to compare the schedule we’ve planned beforehand and the actual schedule that the borrower repays the loan on. As a business owner, this helps you make informed decisions about loan collections and future work with every given customer.

Before disbursement, we work with Initial Schedule. It’s fixated and stored in the system so we can check it afterward and compare it with the Actual Schedule. For active loans, you can see the History and Initial schedule and export this data to Excel as needed for analysis and notifying clients of the schedule we’ll use for a loan.

The initial schedule is always regular – not sequential. But if you choose the open-ended schedule building option, only the next installments will be generated.

Fees in form of rate

To serve ever larger lender audiences, TurnKey Lender v.7.7 allows you to set some fees as a rate on the overall loan sum. Before you could set only charge amounts or percent, now you can set a rate you’d like some fee to be.

Right now, this fee type is best applied for the Merchant Cash Advance industry because in this industry – factor rate is the most acceptable charging model.

Internal Rate of Return (IRR) calculations with included/excluded fees

The internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. IRR is the annual rate of growth that an investment is expected to generate. IRR is ideal for analyzing capital budgeting projects to understand and compare potential rates of annual return over time.

In v.7.7, we’ve deployed an updated version of IRR calculations which can both consider fees or not.

By default, all the fees are included in the IRR, but starting with v.7.7, lenders can exclude specific fees from IRR on the Credit Product level, for example, insurance payments.

Distributing fees over a specific period

Before you could charge one-time fees like the admin fee in some specific installments but starting with v.7.7, you can distribute different one-time fees (e.g. insurance) over the whole loan term not to make one installment too large. Simply set the overall sum you need to charge and then choose how to distribute it over the loan schedule.

Set loan duration as a number of installments

Many lenders need to charge payments on the financing they provide in installments not weekly/monthly. So by popular demand, starting with v.7.7, the lender can set the loan term in the number of installments. Also, we’re introducing the ability to set minimum and maximum acceptable number of installments for loans issued with a credit product.

Additional improvements

As the scope of TurnKey Lender functionality grows, reporting and notifications need to be updated too. That is why in v.7.7 we’re introducing new merge fields for the notifications and smart markers for reporting.

That’s all the updates we have for you in TurnKey Lender v.7.7. Get in touch with questions and stay tuned for more.