A leading asset management firm considered an investment in merchant advances at attractive rates through a new originator

Originator (and servicer) had only a few years of solid business history

The asset management firm needed additional assurances to monitor the investment which could grow to $100 million and mitigate risk

BPA worked with the asset management firm and the originator to establish risk mitigation practices. We then customized systems, designed workflow, and created reports to accomplish the agreed upon goals that included:

Review of underwriting and supporting documents as well as borrower validation for all contracts prior to funding

Monitor originator and investor’s bank accounts to match deposits

Bank activity is classified and balanced to servicer reports

Transactions are reconciled with expected contractual amounts

Valuation of each contract’s present value based on the fund’s guidelines

Preparation of individual investor statements

Weekly / Monthly status reports

Asset management firm became comfortable in the process and results and continues to invest additional risk management

Daily bank activity is monitored and reconciled

BPA provides 3rd party risk management and valuation