Q2 Products

Q2 Originate supports the following types of product categories:

Loan – A lending institution or a bank provides a fixed sum of money to a borrower for a fixed period of time that needs to be repaid as per a specified schedule. Loans may be extended to individual borrowers, as Consumer Loans, or to businesses, as Commercial Loans. Most consumer loans are not collateralized.
Lease – A lease provides finance against a piece of equipment or an asset. The borrower gets the funds to acquire an asset, and after the term of the lease, the borrower can either buy or return the asset.
Line of credit – A line of credit is a flexible loan from a lending institution to an individual or a business. It is an approval to use a fixed amount of money, over time, based on a borrower's needs. This can involve a commitment fee or an interest payment on the borrowed amount. The borrower can draw upon the maximum loan balance (the credit limit).

Note:

You can define the application and approval workflow for multiple product types within each of these by setting up CL Products in the Skuid enabled Q2 Origination (Release 1.2000 and later).
For information on setting up a CL Product, refer to the Setting up a CL Product section in the Q2 Origination Administration Guide.

The model of credit evaluation of the borrower, underwriting of the application, documentation and contract creation, and information collection and recording, therefore, are different for each of these products. For example, in the case of a loan, you may evaluate the credibility of the borrowers, their financial stability, and their ability to repay. In the case of a lease, you would evaluate not only the borrower's credibility but also the net worth of the equipment that you are financing to decide the amount you want to finance. Similarly, for a line of credit, how much your organization can approve for credit, how long will the cash flows continue, how to evaluate the underlying security for it are important considerations.

For each type of lending product, the creditworthiness of a borrower is evaluated differently, as follows:

Lending Product	Credibility Factors
Loan	Income, cash flow, outstanding debt, ability to repay, and to some extent, the purpose for which the loan is requested.
Lease	The borrower's creditworthiness, the net worth of the underlying equipment, the percentage of the equipment value to be financed.
Line of Credit	Duration for which the cash flow must continue, how much credit may be allowed, underlying security, if any.

Product Offerings

The following are some of the common offerings for the different lending products modeled using Q2 Origination:

Type	Description	Examples
Consumer Secured	A consumer secured loan is available to an individual, represented as a Contact in the application is an amount of money lent to an individual is for personal, family, and household purposes is offered against a collateral Consumer loans are monitored by government regulatory agencies for their compliance with consumer protection regulations.	Mortgage loans Auto loans Personal loans, Credit cards Lines of credit
Consumer Unsecured	In an unsecured loan, a borrower does not need to provide any collateral, as security against the loan, to the lender. This is also called a non-collateralized loan.	Student loan Personal loan
Consumer Real Estate	A consumer real estate is available to an individual, represented as a Contact in the application is an amount of money lent to an individual against a property it can be lent to a group of individuals also is for buying or maintaining a property	Property loan
Commercial Unsecured Loan	A commercial unsecured loan is for a business, represented as Account in the application borrowed capital that companies apply toward expenses that they are unable to pay for themselves, and a debt that the company is obligated to repay according to the loan’s terms and conditions.	Business Line of Credit Some business owners use business loans to pay for salaries and wages until their new company gets off the ground. Other companies put borrowed funds toward office supplies, inventory, or business projects.
Commercial Secured Loan	A commercial secured loan is For a business, represented as an Account in the application Borrowed capital that companies apply toward expenses that they are unable to pay for themselves and Debt that the company is obligated to repay according to the loan’s terms and conditions. Requires the business to provide collateral as a security to the lender. This is also called a collateralized loan	Business Line of Credit Asset-Based Line of Credit Equipment Purchase (Fixed) - A car loan where the car is provided as collateral to the lending organization
Commercial Real Estate Loan	Commercial real estate is used to generate an income solely for business purposes. A commercial real estate (CRE) loan typically facilitates the financing of the acquisition, development, and construction of these properties.	CRE (Construction) Office complexes Shopping complexes Hotels and resorts Residential complexes CRE Purchase (Fixed) CRE Purchase (Variable)
Finance Lease	A finance lease is used to purchase equipment for the major part of its useful life. At the end of the lease term, the lessee obtains ownership of the equipment by making a buy offer and paying an amount as per the current valuation of the equipment, often called a balloon payment. A finance lease is included as an asset in the balance sheet of the lessee.	Lease for a Truck
Operating Lease	An operating lease contract is used to finance equipment for less than its useful life. The ownership of the equipment remains with the lessor through the life of the lease. The lessee returns the equipment to the lessor at the end of the lease period without further obligation. Operating leases are treated as expenses in the balance sheet of the lessee.	Lease for a Hospital Equipment