Setting up a financing option

A financing option, or Quick Quote as it is referred to in this guide, is used to provide sample payment amounts and lease term options early on, before you have fetched an applicant's credit report. This is generated by sales representatives or by the dealers. Quick quote is identified as a Financing Option in Q2 Origination. 

You can configure a quick quote by specifying the documentation fees for generating a quick quote, the maximum financed amount and the minimum cash to be paid by the borrower, for both dealer originated deals and direct applications from applicants. 

When you generate a quick quote, these settings are used to arrive at the financed amount and dues from customer. This is explained through the Example below.

Prerequisites

None.

Steps

Perform the following steps to configure a quick quote:

1. Log in to your Salesforce account.

2. Select Origination Configuration .

3. Go to User and Data > Setup > Financing Options. 

4. In the Financial Options page, select New Financing Option. The Financial Options page is displayed where you can enter the details.

5. Select the Enabled check box. This indicates that the quick quote option is enabled. 

6. Specify the Documentation Fees (Dealer Sales). This is the documentation fee for a quote originated by a dealer .

7. Specify the Documentation Fees (Direct). This is the documentation fee when the quote is originated by an internal sales representative.

8. Specify the Maximum Financed Dealer (%). This is the maximum percentage of the amount or collateral value that can be financed for a dealer generated deal.

9. Specify the Maximum Financed Direct (%). This is the maximum percentage of the amount or collateral value that can be financed in a direct deal. 

10. Specify the Minimum Cash (%). This is the minimum percentage of cash that borrowers must invest from their side.

11. Specify the Term Extension Fees that a customer must pay to extend the term of the contract.

12. Specify the Debt to Income (%). This may be calculated from the credit report and income details of the applicant or directly provided by them. This is also used in determining the funding that can be offered to an applicant.

13. Specify the Assumed Interest Rate to be applied on the borrowed amount. This value is used while defining the payments for the funding offered to an applicant.

14. Specify the required Start Date for the quick quote. You cannot modify this value later.

15. Specify the End Date of the quick quote. You can modify this value later.

16. Ensure that the Enabled check box is selected and select Save. You can disable a quick quote later. However, if you save without enabling it, you cannot enable the quick quote later. On trying to edit and enable it later, you receive the following error message:

    Error:

    Disabled Quick Quote Options cannot be enabled.

Once you have set up the quick quote option, you can generate quick quotes for the customers if rate cards are set up. For information on setting up rate cards refer to the Pricing chapter in this guide.

For information on generating quick quotes, refer to section Generating Quick Quotes in the Q2 Origination User Guide.

Example

Let us set up a quick quote with Documentation charges = 200, Maximum financed amount % = 70, and Minimum cash % from customer = 25.

With this setup, let us generate a quick quote for an equipment whose collateral value = 20,000.

Note: The calculation of all amounts in the quick quote is based on the collateral value. 

Scenario 1:

The Collateral Value = 20,000 and the Estimated Selling Price = 19,000. Then, 

• Maximum financed amount = 14000 (70% of collateral value)

• Minimum cash due from customer = 200 (documentation charges) + 5000 (higher of the two values -  25% of collateral value, OR difference of (selling price - maximum financed amount). In this case, both values are 5000.) 

• Net payable to dealer = 19000-5200 = 13800.

Scenario 2:

The Collateral Value = USD 20,000 and the Estimated Selling Price = USD 22,000. Then, 

• Maximum financed amount = 14000 (70% of collateral value)

• Minimum cash due from customer = 200 (documentation charges) + 8000 (higher of the two values -  25% of collateral value, OR difference of (selling price - maximum financed amount).  

• Net Payable to Dealer = 22000- 8200 = 13800.

Field reference