Lending

Empowering Lenders and Originators

• by Stuart Wall
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The Future of Capital Markets Operations is Here By Stuart Wall With housing inventory at an all-time low, there is a growing opportunity for many Residential Transition Loans (RTL) investors. This opportunity has been stifled in the last 18 months by interest hikes and the uncertainty of when market conditions will settle or improve. These same market dynamics have led to a boom in private credit that brings its own growth and logistics pains. While riding out the uncertainty or riding the growth wave brings different sets of problems to lenders and originators, focusing on strategy and operations through technology can ultimately help lenders and originators alike win. In the rapidly evolving world of debt financing, capital optimization is crucial for maintaining competitiveness and ensuring sustainable growth.  Enter Setpoint, the capital markets operating system designed to improve the way teams operate. With its continual growth, highlighted by a recent partnership with Wells Fargo, Setpoint is poised to set a new standard in operational efficiency and liquidity. A New Era of Lending Efficiency Setpoint’s platform includes a suite of products, services and capital that help lenders scale. By integrating with both lenders and originators, Setpoint improves the funding process by focusing on data standardization, automated calculations and reporting, and third-party diligence while ultimately reducing time to fund. For lenders, Setpoint standardizes borrower data, reconciles calculations, and manages Asset-Based Lending portfolios. This is done through real-time analytics and loan-level data tracking that gives more precise portfolio ownership. The platform’s portfolio modeling tools are pivotal in optimizing new credit facilities, projecting IRR, automating facility reporting, and providing a centralized platform for all funding operations and borrower activities. Fulfilling new funding requests is at the heart of the platform, bringing operational efficiency and security to a once manual process. Lenders can review and approve funding requests entirely on the platform. Advance rate step-down schedules, required reserve amounts, and funding logic are configured for each facility and amendment, removing the need to reconfirm compliance to the credit agreement with each request. An audit trail of historical requests and approvals are a click away and plainly documented and then stored for future reporting processes. Once implementation is complete, data ingestion is instant and error free removing manual data transfer processes — no more email threads and FTP folders. Whether pulling data via API or spreadsheet, Setpoint works with lenders directly to ensure standardization and accuracy throughout the portfolio. Lenders can even view any asset’s collateral and funding or advance step-down history without leaving the platform. While using Setpoint, clients see the time to fund drop by 50%, resulting in higher utilization across borrowers. Lenders also lower the time spent monitoring borrowing base and facility compliance with custom alerts and portfolio views. Each facility’s concentration limits and buy-box criteria are monitored in real time with access to individual asset details that contribute to each limit. The platform also automatically tracks the completion of borrower’s recurring financial deliverables, such as monthly financials or compliance certificates, for improved risk management procedures. Additionally, lenders gain access to more frequent and accurate portfolio reporting with enhanced risk analysis and forecasting abilities. Standardized reporting across facilities enables lenders to analyze portfolio performance and risk by funding vehicles. Additionally, lenders can use real-time dashboard views to track metrics such as outstanding commitments, current utilization, or upcoming advance step-downs for cash management, utilization, and for monitoring borrower trends over time. With Setpoint, you can automate workflows and reporting to focus on driving portfolio growth. This approach helps lenders achieve their best work by funding transactions within 24 hours all while managing over $18 billion in transactions annually. Accomplishing this level of efficiency at scale is crucial for lenders looking to improve their market responsiveness and operational agility. By enhancing standardization and liquidity, the platform builds trust and efficiency in the credit system. Eliminating Errors and Enhancing Liquidity As Setpoint manages the end-to-end capital markets process, lenders and borrowers can operate together on-platform. With Setpoint’s Capital OS product, originators can accelerate capital allocation, instantly reduce operational risk, and automate lender management. For originators, it starts with configuring the technology and services to meet individual facility needs. During implementation, seasoned capital markets and engineering teams review everything from facility data structures to eligible asset criteria and data security. Each facility is configured according to the credit agreement’s buy-box and concentration limit requirements. Adding additional facilities is painless and presents new asset allocation optimization features. Once implemented, the platform similarly allows originators to streamline funding operations with automated data ingestion, calculation and reporting workflows, and overall asset management. They can run any number of allocation scenarios or leverage an AI-driven engine to determine optimal asset allocation. Originators can even access real-time Third-Party Reviews and certifications, thus improving capital access while ensuring compliance. All necessary funding operations tooling or services can be found directly on Setpoint. Trust and Efficiency with Wells Fargo Setpoint’s support for a wide array of asset classes, including auto loans, consumer loans, equipment financing, Residential Transition Loans (RTL), Single Family Rental (SFR), Small and Mid-sized Businesses (SMB), solar loans, etc., positions the platform as a versatile tool across any sector. This versatility ensures that regardless of the market segment lenders focus on, Setpoint has the capability to enhance their operational and financial performance. The recent partnership with Wells Fargo is a significant milestone for Setpoint and a testament to the platform’s reliability and efficiency. This collaboration not only enhances the technology’s credibility but also offers counterparties access to a wider network and greater opportunities.  More specifically, as Wells Fargo’s Third-Party Calculation Agent, Setpoint approves and certifies borrowing requests, monthly payments and investor reporting. In the role as Third-Party Paying Agent, Setpoint facilitates client payments via the technology platform by issuing payment instructions, as authorized by Setpoint’s clients, to account banks where funds are held or are to be transferred. The partnership is poised to boost confidence among lenders and originators, signaling that Setpoint’s technology is not only innovative but also trusted by leading