An investor is a person who commits capital with the expectation of financial returns. The investor must have sufficient funds before investing in a loan. Investors may invest in a single loan or multiple loans, and they may opt to fund the complete or partial loan amount on a contract. For any type of investment, you need to set up an investor as an account in the CL Loan system.

If fractionalization is enabled for your organization, one or multiple investors can invest in the loans offered to borrowers. Based on the terms of investment, the investors are paid returns proportionate to their investments. For information on fractionalization, and setting up investors and investment terms, refer to Fractionalization.

Key Concepts

The following are some of the key terms and concepts relating to investor management: 

• Investor: Any individual or institution that invests with the lender to fund loans. An investor is set up as an Account in Salesforce.
• Investor Account: You can set up the investor's bank account, create transactions to add and withdraw funds from the account, and also set up configurations to apply tax on the investors' returns.
• Certificate Rate: The rate at which investors get the return on their investment.
• Investment Order Product: This is similar to the concept of a Lending Product. An Investment Order Product is a template used to define the Investment Order. 
• Investment Order:This is the investor's commitment to invest in a particular loan. The investor orders of a particular investor are available as a related list in the investor account. The Investor tab in the loan contract page also lists all the investment orders for that contract. 
• Investor Fund Flow: The flow that describes the movement of funds between the investors and your organization.
• Interest Accrual: This is the investor's share of the interest component paid back by the borrower. The Interest Accrual batch job identifies..
• Investor Amortization Schedule:The schedule that defines how the investor receives the returns against the investment on a loan account. 
• Investor Payout: Investors are paid returns on their investment from the interest, fee, and principal amounts paid by the borrowers. The fee component is shared with the investors only if the related option is set on the fee, along with the percentage share for all the investors. 
• Service Fee: You may charge a service fee to the investor for maintaining their investment portfolio.
• Tax and service fee: As the interest and fee components paid to the investors constitute their income, you can define whether a tax is deducted on this amount before making payment to the investor.