In most loan transactions, a neutral third-party trustee or loan agent is utilised to ensure that money between the lender and borrowers moves smoothly, terms are followed, and communication is managed. The loan agent might also hold collateral on behalf of the lenders.
Solid accounts, payment, and cash management infrastructure is essential for loan agents to support transactions successfully. In this blog, we describe how Ebury provided the transactional infrastructure to support the day-to-day operations of a European loan agency.
Requirements
The loan agent had multiple requirements for its transactional account set-up to be successful:
Fast time to set up accounts
Each individual loan transaction requires a separate individual account to receive, hold, and collect funds. Due to the time pressure related to loan transactions, it's key that these accounts can be set up in a short time period. As entities involved in the transactions can be in multiple jurisdictions, accounts in various jurisdictions are required.
Collecting funds globally
Incoming funds from lenders can come from multiple countries in multiple currencies. Having the ability to collect internationally is essential.
Hold and generate yield on balances
In some scenarios, funds are held with the loan agent for only a minimal amount of time; in other scenarios, funds are held longer. When funds are held longer, there is a requirement to earn a yield on the funds held to reduce the costs of executing the transaction.
Disburse funds timely, safely, and efficiently
The payment approval flow for disbursing funds to beneficiaries can vary between loan transactions; the online payment portal must align with the loan agent's approval process. For cases where distributions are to be made to a large number of beneficiaries, an efficient method of instructing payments at scale is required.
Our solution
Ebury supports the European loan agency for multiple of its loan transactions across several jurisdictions. This is how it benefited the fund:
- Fast account set-up: After submission of documents, KYC for each of the sub-accounts was completed in as little as 48 hours.
- Global collections: Individual client accounts offered in 20+ countries to support global collections from lenders.
- Cash management: Cash balances held with Ebury are reimbursed each month, and they are instantly accessible to reduce the costs of executing loan transactions.
- Custom payment authorisation: Ability to set up custom payment approval workflows for each account to ensure the correct payment approvals.
- Efficient disbursement: Bulk beneficiary approval and payment upload to increase efficient handling.
- Dedicated client servicing: A follow-the-sun client servicing team to support with each transaction.
Let's discuss your needs
Contact our team of experts to learn how we can help you design a solution that best suits your needs and goals.
