Asset based lending

Banks that offer asset based lending solutions need a continuously updated insight into the value of the debtor open items that serve as collateral.

To minimize the operational efforts of these banks, the Asset Based lending solution of d-basics offers a comprehensive asset based lending solution that enables lenders to automatically report the financeable value of their debtor open items and that puts banks in control of how this value is calculated.

Components of the Asset Based lending service

  • d-basics Collector to extract the required information

    d-basics Collector automatically copies the information that is needed to calculate the net financeable value of debtor open items from the database of the accounting package

  • Asset Based lending plug-in automatically calculates the financeable value of the assets

    Based on the imported information the Asset Based lending plug-in in d-basics Collector automatically calculates the net financeable value of debtor open items

  • Customer support to assist lenders

    The installation, configuration and use of d-basics Collector and the Asset Based lending plug-in is supported by d-basics Service Desk.

Main features Asset Based lending service

Teh Asset Based lending service provides banks with an insight into the value of collateral to support asset based lending

Automatic calculation net value debtor open items

In case of asset based lending, the amount of finance provided depends on the financeable value of the assets. The Asset Based lending service provides a solution for determining that value by automatically calculating the net financeable value of the debtor open items.

 

Bank is in control

To determine the net financeable value of the debtor open items, a number of calculations is carried out by the Asset Based lending service. The parameterization of these calculations is under full control of and can only be adjusted by the bank.

 

Calculation executed by borrower

Using the parameters controlled by the bank, the net value of the debtor open items is calculated on the computer of the borrower and the result is sent to the bank. Although borrower’s computer is used, the borrower cannot change the parameters that are used.

 

d-basics Collector extracts the required information

The following information is needed to calculate the net financeable value of the debtor open items:

  • Debtor master data
  • Debtor open items
  • creditor master data
  • Creditor open items

This information is automatically copied from the accounting package of the borrower.

Because d-basics Collector can import information from more than 800 different types of accounting packages, a solution can be offered to every borrower

Click here for a list of supported accounting packages

The information that is copied from the accounting package is stored in the encrypted and password protected database of d-basics Collector that is located within the computer environment of the borrower.

 

The Asset Based lending plug-in calculates the net financeable value

The net financeable value of the debtor open items is calculated by the Asset Based lending plug-in in d-basics Collector:

  • the net value is calculated based on current information extracted by d-basic Collector
  • the parameterization of the calculation is controlled by the bank and cannot be changed by the borrower
  • the results of the calculation are automatically sent to the bank
 
 
  1. the bank sets and manages the parameters
  2. d-basics collector imports information
  3. d-basics Collector imports parameters
  1. the Asset Based lending plug-in calculates net value
  2. the results of the calculation are sent to bank

Calculation methodology

The Asset Based lending plug-in can apply the following checks when the net financeable value of the debtor open items is calculated:
Check Explanation Parameters contolled by bank
Debtor with negative open amount Excludes all open items of debtor with negative open amount
  • apply yes/no
Intercompany Excludes all open items of intercompany debtors
  • apply yes/no
Debtor with continuity risk Excludes all open items of debtors with a credit rating lower than X (requires importing credit ratings of debtors)
  • apply yes/no
  • credit rating
Address information incomplete Excludes all open items of debtors with incomplete address information
  • apply yes/no
Excluded countries Excludes all open items of debtors that are located in excluded countries
  • apply yes/no
  • included / excluded country list
Debtor with open item older than X days Excludes all open items of a debtors with one or more open items older than X days
  • apply yes/no
  • X days
Compensation debtor / creditor Deducts amounts payable from amounts receivable if debtor is also creditor
  • apply yes/no
Concentration Sets maximum to sum of open amounts related to a single debtor that may be considered financeable
  • apply yes/no
  • % concentration
Open items with negative amount Disables the age filter of graduated rate check for open items with negative amount (so negative amounts are taken in consideration even if > X days)
  • apply yes/no
Graduated rate (staffel) Determines – based on age – for which percentage the non excluded open items must be considered financeable (multiple graduated rates supported)
  • graduated rates (if younger than X days than Y% financeable)

Example asset based lending report

 

This report is an example of the output that can be generated by the Asset Based lending plug-in.

Depending on the demands of a bank the output can also be generated in entirely different formats.

For example, XML, JSON or TXT files can be created that can be processed automatically by the bank.

These files can be uploaded to the bank according a predefined time schedule and once the bank has received the files, the content can be used to automatically set the borrower’s new credit limit.

All without the borrower or bank having to perform any manual operations!

Integration of business information

The Asset Based lending plug-in uses business information to fully automate the calculation of the net financeable value of the debtor open items:
  • Identification debtors and creditors

    To enable the automatic calculation of the net financeable value each debtor and creditor must be given a unique ID. To achieve this the Asset Based lending plug-in is connected to Corporate rating, the identification service of d-basics.

    Based on the ID’s the Asset Based lending plug-in can determine which debtors are also creditors (for compensation). Further the ID’s are used for all other checks that are based on company information reports

  • Business information borrower

    A business information report contains the legal group information of the borrower. This information is used to determine which debtors are intercompany debtors.

    Additionally the report contains information about the solvability of the borrower, this information can be added to the asset based lending report that will be sent to the bank.

  • Business information debtors

    The Asset Based lending plug-in can import the credit rating of each debtor and use this information to automatically exclude debtors with low credit ratings or in case of bankruptcy (obtaining credit ratings of debtors will result in extra costs).

 
Automatic identification of debtors and creditors

Where possible, d-basics Collector automatically identifies the imported debtors and creditors. However the rate of success of this automatic identification depends very much on the quality of the master data that is imported from the accounting package.

For those debtors or creditors that cannot be identified automatically, the identification must be completed manually by selecting the matching company from a list of most likely matches.

Because the manual identification of the remaining debtors and creditors is done via d-basics Portal, this process can be carried out by either the borrower, bank or d-basics (where d-basics will charge costs for this additional service).

Support by d-basics Service Desk

Because the Asset Based lending service plays a crucial role in the lending process, d-basics Service Desk provides all the service needed to make sure that the upload of the asset based lending reports is not disrupted:

  • during the installation phase, d-basics Service Desk will actively contact the client to assist with the installation and configuration of the software
  • once the software has been installed successfully, the borrower can contact d-basics Service Desk if support is needed.

d-basics Service Desk can be contacted on Dutch working days between 8:30 and 17:00 (CET).

Support is offered in Dutch, English, German and French.