Dynamic Collateral Monitor

Principal workflows

• Connect: The borrower authorizes a read-only connection from their ERP or accounting system, or agrees a scheduled file. The lender's analyst maps the borrower's ledger to the loan's eligibility criteria.
• Reconcile: Each borrowing base certificate is compared with the borrower's ledger as of the same date. Totals, aging buckets and ineligibles are recalculated from the source data and differences are shown line by line.
• Test: Invoice-level tests look for receivables that may not be genuine or collectible: invoices with no matching sales activity, reissued invoice numbers, credit memos after period end, and debtors that never pay.
• Decide: Analysts review the flags, request explanations or debtor verifications, and recommend availability. A credit officer approves the recommendation or any exception to the loan's terms.

Who uses it

• Asset-based lending teams at banks, credit unions and commercial finance companies
• Collateral and portfolio analysts who review borrowing base certificates
• Credit officers and loan committees who approve availability and exceptions
• Field examiners who plan and scope collateral exams
• Credit review, internal audit and examiners, who need evidence of collateral monitoring

Reporting

• Certificate differences by borrower and period
• Recalculated availability against reported availability
• Dilution, aging and concentration trends
• Open flags and borrower requests by age
• Debtor verifications sent, answered and outstanding
• Portfolio watch list for credit committee

Features

• Read-only ERP connection: With the borrower's authorization, receivables, sales and cash data are read directly from NetSuite and other supported systems, without access to change anything.
• Certificate reconciliation: Each borrowing base certificate compared with the ledger as of the same date, with differences listed by debtor and invoice.
• Eligibility engine: The loan agreement's eligibility criteria, such as aging cutoffs, cross-aging, concentration limits, affiliate and foreign debtors and contra accounts, applied to the ledger data.
• Invoice integrity tests: Flags for invoices with no matching order, shipment or payment history, reissued or re-dated invoice numbers, and unusual invoices near period end.
• Dilution tracking: Credit memos, write-offs and non-cash adjustments measured each period, by debtor and in total.
• Concentration and debtor view: Each account debtor's balance, aging, payment history and share of the borrowing base across the period.
• Debtor verifications: Selected invoices sent for confirmation with the account debtor, with the request and response recorded against the invoice.
• Borrower workspace: Borrowers submit certificates, answer questions and see open requests in one place, instead of by email.
• Availability recommendation: The analyst's recommended availability, the adjustments made and the reasons, sent to a credit officer for approval.
• Field exam support: Flags, findings and trends since the last exam packaged to help field examiners scope their work.
• Portfolio watch list: Borrowers whose differences, dilution or concentrations are rising, across the whole ABL portfolio.
• Audit trail: Every data pull, recalculation, flag, finding and approval recorded with the person and time.

Integrations

• NetSuite: A read-only connection authorized by the borrower's NetSuite administrator, using a role limited to the records the monitor needs.
• Other ERPs and accounting systems: Other systems connected by API where available, or by a scheduled export the borrower agrees to provide.
• Loan system: Loan terms, commitments, advance rates and outstanding balances from your commercial loan system.
• Lockbox and cash collections: Collections from the lender's lockbox or controlled accounts, to compare with cash receipts in the borrower's ledger.
• Field exam tools: Findings and sample selections exported for your field exam team or outside examination firm.
• Single sign-on: Lender staff sign in through your identity provider (SAML or OpenID Connect); borrower users have their own accounts with multi-factor authentication.
• Work API: Reconciliations, flags and approvals available to your data warehouse and credit reporting through the Moraph Work API.

Deployment

• Moraph cloud: Hosted and operated by Moraph in the United States region. United Kingdom and Australia regions are available for lenders outside the US.
• Dedicated environment: A single-tenant environment for lenders whose policies require isolation, scoped in the proposal.
• Branded borrower workspace: The borrower-facing pages carry your institution's name and branding.

Security and privacy

• Single sign-on: Lender staff sign in through your identity provider, so your password and multi-factor policies apply.
• Read-only, borrower-authorized connections: ERP connections are authorized by the borrower, limited to the records the monitor needs, and can be revoked by the borrower or the lender at any time.
• Role-based access: What each person can see and do follows their role; recommending availability is separate from approving it, and borrowers see only their own company.
• Encryption and keys: Client and borrower data is encrypted, with keys Moraph staff cannot use without explicit, time-bound authorization.
• Complete audit trail: Every data pull, view, change, decision and export is logged with the person and time, and cannot be edited.
• Data residency: Data stays in the hosting region you choose: the United States, the United Kingdom or Australia.

Limitations

• The monitor does not prove that a receivable is genuine. It compares reported figures with the borrower's own records and flags patterns worth checking; a borrower who falsifies its ledger can still mislead it, so field exams and debtor verifications remain necessary.
• It needs the borrower's authorization and cooperation. If a borrower will not connect its system or provide exports, the monitor works only from the certificates and backup supplied.
• Connections to systems other than NetSuite depend on the system and the borrower's edition; some will need a scheduled export instead of a live connection.
• It does not decide availability or declare a default. Credit officers approve availability, reserves and exceptions under your credit policy.
• It covers accounts receivable. Inventory, equipment and other collateral classes are recorded as reported but not reconciled to source systems.
• It is not a loan servicing system. Advances, payments and interest stay in your loan system.
• It does not perform UCC lien searches or filings.
• Debtor verification responses depend on account debtors replying; the monitor records requests and responses but cannot compel an answer.

Next steps

Book a demonstration or a technical briefing at www.moraph.com/solutions/dynamic-collateral-monitor. Purchasing routes and company information: www.moraph.com/how-to-buy.