Generate Lease Pricing Using Rate Card

Q2 Origination provides you with an in-built calculator for pricing your leases using Rate Cards. A Rate Card is a chart that contains the various lessor options available from a lender. You must set up the rate card for a CL product, and the application for that CL product automatically uses the yield value specified in the rate card for pricing the deal. A rate card can have many rate card details, such as Payment Frequency, Min and Max Financed Amount, Rate Factor, Yield, and Term, which gives you the flexibility to address diverse lessee preferences. When you generate pricing, multiple pricing options are generated corresponding to the rate card details, and you can select the pricing that is most suitable. 

You can review all the options with your customers and re-price the deals to arrive at the best solution for your customer.  

Here is how to go about generating Lease pricing using rate cards in Q2 Origination.

Configure Fees

If you want to consider fees to calculate lease pricing, first, you need to configure fees to be added to a lease application. 

On the Lease Pricing page, the Fees option displays the fees (with Event Type: Lease Origination only) that are associated with the product type for which the lease application is created. The details of the displayed fees can be modified, and also new fees can be added. After the pricing is generated, its details in terms of the payment amount and the payment frequency are displayed on the Payment Schedule page.

You can associate a fee to an asset class so that it is easy to record income or expense-related additional cash flows, which are linked to the equipment to be leased.

You can capture payment details against income and expense fees. This helps the system to disburse the income and expense payments of fees to third parties such as vendors, dealers, suppliers, or brokers, which is based on different kinds of fees defined in the system.

Prerequisites

Before you proceed to generate pricing using rate cards, ensure that the following prerequisites are met: 

• The Rate Card is set up for the lease CL product.

• The Financing Options is set up for the lease CL product.

• The fee type is defined.

• A fee set is created.

• The fee type is associated with the fee set.

• The fee set is associated with the product.

Steps

Toadd or edit a fee:

1. Log in to your Salesforce account.

2. Go to (App Launcher) > Applications.

3. On the  Applications tab, select the required application ID.
   

4.  Go to More > Lease Pricing > Fees.

   
   

5. To create a new fee, select Create Fee.
   

   The list of preconfigured Fee Definitions is displayed.

   
   

6. Select the required Fee Definition Name and then select Apply Charge.

   
   

7. In the Confirm section, perform the following and then select Save:

   
   

   Field Name	Action and Information
   Frequency	Select one of the following frequencies of payments: One-Time Daily Weekly Monthly Yearly
   No of Payment	Specify the number of fee payments expected at the selected frequency. For example, 12*Monthly payments, 4*Quarterly Payments, or 2*Half Yearly Payments. Note: This field cannot be edited if the Frequency = One-Time.
   Original Amount
   Date	The start date from which this fee is charged.
   Type	The type of the fee. This is a display-only field. For example, Amortized Fees, Maintenance Fees, and so on.
   Taxable	Select this checkbox if the fee is taxable.
   Include in Dues	Select this checkbox to include the fees in dues and to display them along with the rent. This checkbox can be enabled for fees with a frequency other than ONE-TIME.
   Capitalize	All the fees that have this checkbox enabled are added to the financed amount. Note: This checkbox can be enabled only for One-Time fees.
   Include in APR	Select this checkbox to include the fees in calculating the Annual Percentage Rate (APR).
   Equipment	Select the equipment to be associated with a fee. This helps to record the income or expense-related fees.

8. To delete a fee, go to Lease Pricing > Fees page, select  (Delete Fee) for the required fee row.

9. To edit a fee, go to Lease Pricing > Fees page, select  (Edit record details) for the required fee row.
   

   
   

   1. Add Payment Details - This section captures the payable details against the expense fee such that the amount and the disbursement date against all the vendors are recorded in the lease contract.
      

   2. Select Add Payment Details.

      
      

   3. Provide the details as described in the following table, and then select Save:
      

      Field Name	Action and Information
      Pay To	Select the vendor account to which the payment is made.
      Payment %	Specify the percentage at which a payment amount is to be made.
      Disbursement Date	Specify the disbursement date of the payment amount.
      Due Day	Specify the date on which you want the next bill to be generated.
      Disbursement Frequency	Select one of the following disbursement frequencies of the payment: One-Time Daily Weekly Monthly Yearly
      Number of Disbursements	Specify the number of payments that must be made, this is the payment amount out of the fee amount. For example, 12*Monthly payments, 4*Quarterly payments, or 2*Half Yearly payments.

      Note:

      Once the payment details are added, you can edit the required details.
      

   4. In the Fee Details section, make the required changes, and then select Save. 

Override Pricing

The Payment Amount field is updated based on the selected pricing option.

Based on the pricing generated from the rate card, you can override the payment amount or yield or the rate factor. This enables you to solve for a rate card, payment amount, or yield so as to define custom financed amount calculation through configuration.

Prerequisites

Before overriding the pricing using rate cards, ensure the following prerequisites are met: 

• The Rate Card is set up for the lease CL product.

• The Financing Options is set up for the lease CL product.

Steps

To override pricing for an application:

1. Log in to your Salesforce account.

2. Go to (App Launcher) > Applications.

3. On the Applications tab, select the required application ID.
   

4.  Go to More > Lease Pricing > Pricing.

5. In the Pricing Details section, select (Override).

   
   

   The Pricing Override window is displayed.

   

6. Go to the Override Details section, and select the required option in the Override Type field.
   Supported options:
   

   • Payment Amount- The new payment amount requested by the lessor.

   • Rate Factor- The rate factor to be applied to the financed amount to generate the payment amounts.

   • Yield– The maximum percentage to which the asset can be financed.
     

7. Specify the required value for the selected option.

8. Select Calculate.
   

   The Calculated Value field is updated.

9. Select Save.

   A row is generated in the pricing Details section with (Edit Override), displaying values corresponding to the overridden parameter.

   

10. Select the checkbox of the new pricing option created and select Select Pricing .
    

    The following message is displayed,"Pricing Option is selected successfully."

11. Optionally to generate pricing, in the Payment Term section, select Generate Pricing .

    • The Status field of the Lease application is updated to New-Pricing Generated.

    • The Term Selected and the Payment Amount fields are updated accordingly.