LEASE ORIGINATION: THE BASICS CAN BE EVEN EASIER WITH THE RIGHT SOFTWARE

To take full advantage of emerging opportunities, lenders need software that provides the user experience that today’s consumers expect and applies automation and innovative technologies to streamline the lease origination process. In this blog, we focus on lease origination basics and explain how the right software makes the process easier for applicants as well as lenders.

Lease Origination: Capture Applicant Data Easily and Accurately

How easy is it for a prospective lessee to apply for a lease? If lease origination is a protracted process because of limitations on where and when it can be done, or requires printing, filling in, and mailing paper forms or copies of documents, then it’s time to move to a completely digitized process. A modern lease origination system enables easy and accurate lease applications by:

• Allowing online submissions via desktop or mobile devices—tablet or smartphone.
  
• Guiding the applicant using display logic, masking, validation, and rules to intuitively and accurately enter the required information.
  
• Digitally capturing documents—driver’s license, pay stubs, proof of residence—and submission as part of the lease application.
  
• Submitting, within minutes, a complete lease application. 

A completely digital lease origination process makes it easier for applicants to submit an application online. Using a mobile app, an application can be submitted at any time, from anywhere. Lenders who also extend these completely digital capabilities to dealerships can differentiate themselves from lenders still bogged down with paper-based lease origination processes. 

A completely digital lease application lays the groundwork for greater efficiency in leasing decisioning by allowing lenders to begin the evaluation process immediately. There’s no need to wait for paperwork to arrive and no need to rekey data from paper. As we’ll see in the next section, in the best of cases, a leasing decision can be made in seconds and an offer can be sent by email or text to the applicant. 

Employ Automation to Evaluate Creditworthiness

With a completely digital lease application, a modern lease origination platform allows lenders to automate many steps and decisions that previously required an underwriter’s time and attention. The automation features that bring a significantly greater degree of efficiency to the decisioning process are decision rules, workflow, and integration with innovative information services. 

Rules allow comparisons of applicant information against predetermined criteria and based on the outcome of the comparison, can determine the next step in the lease origination process. Using rules, comparisons can be executed in a fraction of a second without the need for underwriter involvement.

Rules can be simple or complex. The most sophisticated use of rules can drive auto structuring to boost an applicant’s chances of obtaining credit if they have initially failed one or more credit policies. Auto structuring iteratively modifies terms with the goal of matching a credit policy. 

Workflows can control the lease origination from start to finish and use rules to determine the specific steps. Individual workflows can be established based on the type of lease—auto, recreation, boat, etc. Workflows determine the proper sequence of tasks to be accomplished—bureau call, check for duplicate applications, check for fraudulent information, create a scorecard, underwriter reviews, apply auto-decline rules, apply auto-approval rules, include stipulations, and create an offer. Within each of these steps, additional workflows may be included.

Combining workflows and rules helps ensure that lease applications are processed consistently and quickly to allow a lender to respond promptly to every leasing opportunity.

Integration allows a lender to take advantage of a growing number of innovative leasing information services that help accelerate decisions and reduce risk.

• Employment and income verifications confirm or refute the information provided
  
• Identity fraud analysis uncovers indications, subtle or obvious, of misrepresented information
  
• Vehicle valuation compares the declared vehicle value against an extensive database to arrive at an accurate valuation

These and dozens of other integrated information sources can be configured by knowledgeable leasing professionals. There’s no need for protracted, customized programming to take advantage of these capabilities and improve confidence in your decisions.

Making It Easy to Say Yes 

When you’ve made it easier to apply for a lease and you’ve quickly and confidently confirmed an applicant’s creditworthiness, you can also make it easy for the applicant to accept your offer. Packaging the lease offer as an e-contract and sending it via email or sending a text with a secure link to the e-contract is a sure way to further impress a prospective borrower with the speed of your response. The terms and conditions stated in an e-contract can quickly be reviewed online, on a mobile device, anytime, anywhere. There isn’t a more convenient way to extend an offer. And by including e-signature capabilities in the e-contract, you make it easy for the applicant to accept the terms and conditions and allow lenders to take the next step.  

Lease Origination Basics: Focus on Efficiency  

A modern lease origination solution enhances the efficiency of nearly every basic step of a lease origination process—submission, decisioning, and extending an offer to qualified borrowers. defi‘s origination systems leverage advances in automation and cloud-based information sources to allow lenders to be more efficient, productive, and responsive to their leasing opportunities. 

Products and services from defi SOLUTIONS support lease and loan origination and cover the entire leasing and lending lifecycle — from customer engagement to default management. With defi origination systems, lenders can run a total loan or lease originations operation on a single platform, regardless of the collateral or product.

defi platforms let you configure multiple credit flows for different scenarios. For example, incoming applications are assigned a configurable credit flow. Leasing applications might be assigned one credit flow, loans another. Flow rules determine how an application is handled, whether it’s auto decisioned (auto approved, auto declined, auto conditioned), auto structured, or manually decisioned, and whether it gets auto funded or manually funded.