With the rise in global economic uncertainty, companies are increasingly looking to diversify their sources of funding – and increasingly turning to invoice factoring. According to Allied Market Research, the global invoice factoring market was estimated at $1946.5 billion in 2021 and is expected to hit $4618.9 billion by 2031. This would be a compound annual growth rate of 9.4%.
Any company providing invoice factoring services should make use of a loan management system (LMS) to take your product to the next level in terms of opportunities for growth. Using invoice factoring products can ensure companies an increase in revenue and financial flexibility. Advances in technology, such as our cloud-based LMS solution, are allowing companies providing these services more opportunities to scale their business by providing end-to-end automation.
InGain has had an opportunity to work with leading market players to develop an SaaS loan management solution specifically dedicated to the needs of invoice factoring service providers. It offers unseen customisation opportunities that match the unique nuances offered by each individual company.
What is a loan management system?
An LMS is a lending solution that facilitates end-to-end lending processes for both online and offline operations. A full lending lifecycle management system enables lending processes to be fully automated, from customer onboarding through to loan origination, loan servicing, collateral management, warnings and debt collection.
Invoice factoring LMS product features
Keep your company’s future expansion in mind and choose a loan management solution that can facilitate a broad variety of invoice factoring services. An LMS should allow you to easily onboard customers, disburse payments and conduct debt collection. Here are the crowdfunding specific features you should expect your LMS to cover:
1. Setup customisation
When setting up a new invoice factoring product , it’s crucial for your company to be able to customise the LMS features to fit your business model. The system should support a product setup process where you can define specific loan conditions and service fees. If you’re using a no-code or low-code system, such customisation options shouldn’t require any additional IT assistance.
2.. Agreement generation
Any LMS catering to invoice factoring loans should include an agreement generation module that can automate the whole process. The solution acquires customer data during the onboarding process and automatically creates an agreement based on a customised template. This process greatly alleviates the workload caused by manual agreement generation, allowing for faster business scaling.
3. Pre-approval options
Depending on your area of operations and type of licence, your company’s crowdfunding lending product most likely requires integration with an electronic money institution (EMI). While your platform administers the wallet, there may be requirements to store the money itself in an EMI. Your LMS will need to be able to easily integrate your investors’ wallets with the necessary EMI via an application programming interface (API).
4. Built-in dashboard
The dashboard is a crucial component of any LMS solution. It enables your customers to generate reports that provide a comprehensive overview of all incoming and outgoing payments. These reports should show funds available, detail any fees, and show any late payments. The LMS should also generate annual income statements for customers, which would be required for tax purposes.
5. Customer data
A very important part of the onboarding process is conducting know your customer (KYC) and anti-money laundering (AML) analysis. Your company can’t legally conduct business with a client through your invoice factoring product without completing these checks. A great feature any LMS should have is the ability to renew this data after a pre-defined time period (e.g. every 6 or 12 months).
6. Third-party integrations
Any LMS should be able to smoothly integrate with any third party services you’re already using in your operations, or plan to use. Whether you need data access, scoring, payment solutions or IP telephony, your system should be able to integrate with all the solutions your business needs to operate at full potential. A new LMS should also be able to leverage any existing system your company already has running, such as a data connector or decision engine.
7. Additional features
Some additional features you may want to look for when choosing an LMS for your invoice factoring needs include an option to acquire new customers by integrating with brokers and affiliate networks. This feature can be further streamlined into a white-label website or mobile application with a predefined customer journey, including multiple company representative onboarding, as well as ready customer self-service portal. Integration with payment gateways for automated loan disbursement and payment collection can also further automate your company’s lending product. If your LMS has the capability to offer real time data for your business intelligence tools, such features will enable you to react more quickly and make better business decisions.
For over 10 years InGain has been supporting the consumer finance industry, fintech companies, and banks with an out-of-the box, yet fully customisable loan management system. On top of the core system, the company also delivers system integration services and custom feature development. InGain has executed hundreds of projects with more than 50 global clients across a variety of sectors.
The loan management system caters to both secured and unsecured business and retail loans, including instalment loans, auto leasing, mortgages, line of credit, buy-now-pay-later, payday loans, invoice factoring and more.