Margill Installation – Network Drive not Displayed – Windows 10

You are installing a Margill product and do not see your mapped network drive on Windows 10. Here is how to solve this in many cases anyways…

This is not as difficult as it seems…

Turn on SMB Direct from the Windows Features and edit the registry key called EnableLinkedConnections.

  1. Click the Start button, click Control Panel, click Programs, and then click Turn Windows features on or off.
  2. Select the check box next to the SMB Direct feature to turn it on.
User-added image

To configure the EnableLinkedConnections registry value:

  1. Click Start, type regedit in the Start programs and files box, and then press ENTER.
  2. Locate and then right-click the registry subkey HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\System.
  3. Point to New, and then click DWORD Value.
  4. Type EnableLinkedConnections, and then press ENTER.
  5. Right-click EnableLinkedConnections, and then click Modify.
  6. In the Value data box, type 1, and then click OK.
  7. Exit Registry Editor, and then restart the computer.

What is #1 Loan Servicing Software in the World?

Very interesting question, but is there an answer?

Being number 1, being the Top is the ultimate goal for many… The ultimate achievement… The Gold medal!

We hear this in political speeches: we are the BEST, we are the GREATEST, never in the history have we been SO GREAT…

Vying to be Number 1 is also true for loan solution providers.

I thought I would write this article since I came across, simply by surfing the web and checking out other loan tech companies’ websites, that at least three companies have the #1 lending technology. Congratulations to all of you!

# 1 is taken three times so I guess this means Margill Loan Manager is the BEST, the GREATEST #2 software solution out there?

There are many good, even great loan software out there and many not-so-good ones that say they can do just about everything… but none can really. In the end, when you are looking for loan servicing software, what’s important, is that the solution fits your own special needs and that customer support is there for you.

PS: No hard feelings #1s…

Marc Gelinas, CEO
Margill Solutions

Your Credit Score May Soon Change. Here’s Why.

Your credit score — that all-important passport within the financial world — may be about to change. And it won’t necessarily be because of anything you did or didn’t do.  Read this article by Tara Siegel Bernard 

Calculating Interest Distribution to Investors in Complex Participation/Syndicated Loans, Pools or Funds

Maximizing Investor Returns / Reducing Risk through Participation/Syndicated Loans

Investors are constantly looking for new ways to maximize their returns. Investing in higher risk private loans is a method to generate 10 to 20% + annual returns. Of course, one of the objectives is to reduce risk and this can be achieved when multiple investors participate in a loan.

In higher-value commercial loans, bridge loans, loans for entrepreneurs (for starting or expanding a business) and short-term tax credit loans, many investors can participate or pool their investments to finance larger projects. Funds based on industry or loan product or investor pools are often created to reduce the risk of each investor while offering maximum flexibility.

Some loan funds and loan pools allow the investor to invest into or divest from a fund/pool/loan before the loan comes to maturity. An investor can decide for example to invest in a loan when the real-estate project reaches a specific milestone or divest when he/she feels there is a better opportunity elsewhere (usually divest to another fund within the same finance company as opposed to a complete withdrawal).

Again, to minimize risk and reduce cost to the borrower, in some loans, notably, construction loans, principal is extended progressively to the borrower only as required and contingent on achieving project milestones. These new principal advances are financed by existing or new investors that can join a loan or fund. This obviously adds to the complexity of calculating the distribution of income to investors.

Revenue models for the investor vary greatly: some Fund Administrators will pay the investor no matter if the borrower pays or does not pay the accrued interest every month (revenue based on accrued interest) and others will only pay the revenue portion to the investors if the borrower pays at least the accrued interest (revenue based on cash received). Whether based on accrued interest or cash paid, the revenue must be redistributed to each investor on a pro-rated basis of his investment amount and participation time (number of days or months of participation).

The Impossible Job of Interest Distribution to Investors

With this flexibility though, comes a major headache for Fund Administrators who must manage the revenue (interest revenue) for each investor based on the amount invested and on the time period this investor was involved in the loan.

Not many software tools can deal with such complexity, and although spreadsheets can be created to solve part of the problem, the time required to compute accrued or paid interest and investor distribution can take days, not to mention the great chance of error.

Calculating the interest in participation or syndicated loans is one piece of the equation, preparing statements is the next phase, a long and arduous process without the proper tools.

Investor management software to the rescue!

Yes there are solutions out there! Margill Loan Manager, a world-class software product, sold in over 40 countries, offers a highly sophisticated Investor module specifically created to manage irregular investments, divestments, payments and of course calculate revenue distribution by investor.

Let’s do a example and throw in a few curve balls…

Borrower ABC Inc. is given a credit facility of 1,250,000 (could be $, £, €, no matter) at a rate of 12% annually for 12 months. Investors in the participation/syndicated loan receive this return too.

  • If investors were to receive a lower return than the rate charged to the borrower, then this lower rate would be entered or, when reporting, a special custom report or statement could be created to factor in the spread or revenue for the Fund Administrator.

We will be using Compound interest, compounded monthly (we could have used Simple interest or compounding at another frequency (annually, semi-annually or other). We will also be using the banking method called the Effective rate method. Day count will be the most precise: Actual/Actual – could have been Actual/365, 30/360 or Actual/360.

ABC must pay accrued interest every month.

  • First draw of 300,000 on Feb 2, 2019
  • 5 investors wish to finance this first draw:
  • Fund A: 90,000
  • Fund B: 75,000
  • Fund C: 55,000
  • Fund D: 40,000
  • Fund E: 40,000

Initial loan advance of 300,000:

First interest payment on March 1, 12019. Total accrued interest is 2892.34. The accrued interest and individual investor portion is automatically calculated. We allocate to All Funds (investors in this case). Interest is prorated to each investor.

These interest payments can also be mass posted through the Post payment tool (see below).

Special event:

  • Fund C: Withdraws 25,000, April 12
  • Fund A: Replaces Fund C for 25,000, same day

Reallocation from Fund C to Fund A:

May 1 and June 1 interest payments are posted with the Post payment tool. This tool can post interest payments for a single or hundreds of loans, in seconds.

We can see how the 3003.24 interest payment was applied. Reports can show full portfolio totals for each investor/fund:

The Borrower makes a second draw (the operation is not shown in the images below since method was explained in example above…):

  • Second draw of 250,000 on June 17, 2019
  • Fund E: 100,000
  • Fund F: 100,000
  • Fund G: 50,000
  • Fund C: Complete divestment (30,000) July 2
  • Fund E: Replaces Fund C, same date

Borrower inherits from a rich uncle and pays back 65,250 on July 25. Outstanding interest is first paid back, and the balance pays the principal. The payment could also have gone 100% to principal with the “Principal Only” option.

On the lower part of the window, one sees the distribution by fund. Notice Fund C had a 0.00 principal balance but a 10.02 interest balance that will get paid off with the 65k payment.

Finally, rich uncle did not leave enough to ABC so there’s a need for more money (operations for adding draws an interest payments are not shown since we are now experts at adding these):

  • Third Draw of 600,000 on October 3, 2019
  • Fund A: 200,000
  • Fund E: 150,000
  • Fund H: 175,000
  • Fund I: 75,000

For the November 1 payment that was supposed to pay the accrued interest (10,506.48) ABC can only pay 1000 (see bottom portion).

The December 1 interest payment would then be much higher to pay the outstanding and current interest for a total interest payment of 20,479.77.

Construction is now complete and on Jan 18, 2020 ABC decides to pay back only 250,000. Fund Administrator decides that Fund A should get paid back first.

Outstanding interest (1653.76) is first paid to Fund A exclusively:

The remaining payment balance, 248,346.24 is then paid to principal to Fund A exclusively (use the “Principal Only” option):

And finally, the full loan is paid off on February 14, 2020. All interest is paid to the investors as well as the principal bringing the loan balance from 844,402.41 to 0.00 with the Payoff button:

Final schedule:


Multiple other options are available in the module such as:

  • Non-cash principal and interest Adjustments
  • Non-cash partial or complete P&I Transfers OUT of old loan and IN to new loan
  • Bad debt

A loan can include dozens of investors and a portfolio hundreds of investors.


The reporting module allows the production of reports at any date and for any time period for all investors/funds:

  • All transaction types (principal advances, cash payments, reallocations, transfers, adjustments, bad debt)
  • Principal balances
  • Interest accrued
  • Custom-built statements

The reports are produced as spreadsheets (Excel) or PDF.


Note: This module cannot include fees. It is meant to calculate the return to each investor. A second loan type for the borrower interactions, could include extra fees (origination, points, automatic penalties, etc.).


For more information on this very special module, please contact Margill Customer support: support@margill.com or call at 450-621-8283.

Margill Loan Manager 5.1 soon to be released – Release Notes available

Margill Loan Manager 5.1 will be released later in January or early February. Consult the Release Notes.

Margill Loan Manager – Ageing report – with refinanced loans

Q: If a loan was refinanced and the payments revised based on the refinanced balance, can the loan account still be in arrears?  Doesn’t the refinancing and revised payments take into consideration any prior arrears? 

A: Arrears are always a little tricky with refinanced outstanding amounts since a human must take a decision as to whether the new payments to be added are simply extra payments or are to compensate for the unpaid payments in the past. The examples will help…

A most important column in the schedule is the “Expected Pmt” column. This column indicates how much was expected for this line and subtracts the actual payment amount from this amount to generate the Outstanding amount.

  • On 07-06-2018 I was expecting 439.58 and got a 439.58 payment so Outstanding = 0.00.
  • On 10-06-2018 I was expecting 439.58 and got 0.00 so Outstanding = 439.58 and so forth

If an extra payment (unexpected in the normal scheme of things) is made, then the Expected Pmt should be 0.00 and the Outstanding is thus reduced.

If a loan is refinanced, you must make sure that as of this moment, your Outstanding amount gets progressively reduced to 0.00 and you do this with the Expected Pmt column in which you would put the Expected Pmt to 0.00 for the new payments that are added or changed to give 0.

In the above example, the loan is refinanced with lower payment amounts since the 439 was too high for the borrower – 6 payments were added and these now become 175.20 to reach 0.00. One could argue that these payments are extra and thus the Expec. Pmt should be 0.00 for each, so we manually change the Expect. Pmt to 0.00.

NOTE: In order to be allowed, to change the Expected Pmt amount, this must be allowed by the Margill Administrator in Settings:

As these new payment become paid over time, the Outstanding amount gets reduced…

If on the other hand, a second amount (new Advance) was lent to the borrower and extra payments were added, then I would not change my Expected Pmts to 0.00 since these new payments become part of the normal payments, in the normal scheme of things. So Outstanding is quite subject to interpretation…

I actually cheated below by entering 3 of the 12 new payments with Expected Pmt of 0.00 to bring my Outstanding back to 0.00. Outstanding must be 0.00 or greater, never less than 0.00 even if one could argue the borrower overpaid.

Automatic Margill Loan Manager emails – Gmail managed emails (G Suite / formerly Google Apps) are blocked

Q: I have set up automatic emails in Margill Loan Manager. We use G Suite for these but when I test the email connection if get a message saying the Google blocked the app since it is a less secure app. What can be done?

A: We see this once in a while when using GSuite.

Margill has no control over this since Margill simply sends a request to the Gmail (or other) SMTP server and this server checks your User name and Password and accepts to send the email or not. Pretty straightforward stuff, no big technology behind this…

However, GSuite or other mail providers may not accept the communication since it is sent by a software that they do not recognize and may give you a message such as:

You will thus have to allow your email account to communicate with Margill. Log into the G Suite Admin Console (https://gsuite.google.com). You must be the G Suite administrator. Go into security settings and click “Allow users to manage their own access to less secure apps”. Then go into your own Gmail settings and turn on the “Allow access to less secure apps (not recommended)”. Google will tell you a number of times that this is unsafe.

This should now allow the communication.

Setting up and Servicing Agricultural (Farm) Loans Efficiently

Setting up and Servicing Cash-flow adapted Agricultural (Farm) Loans Efficiently

Most farmers have special needs when it comes to their loans to buy land, equipment and other farm assets because of their seasonal cash-flow and income spikes. Therefore, agricultural loan products shouldn’t be set up like conventional personal or business loans or mortgages with regular fixed payments, but rather adapted to each farmer’s particular revenue and expenditure rhythms.

A crop farmer most often has greatest cash needs in late Winter (next season purchases), Spring and Summer and greatest cash income in Fall at harvest. Livestock farmers on the other hand, can usually generate steadier expense and income streams.

Depending on crop type and location of the farm (colder countries versus subtropical or tropical countries), there may be two or more harvest seasons. Harvests can be considered Good or Poor, adding yet another cash-flow need to be considered when setting up a loan payment plan.

Lines of credit offer much flexibility of course to the farmer, allowing to borrow and refund as needed.  When lines of credit are not available, for capital purchases for example, amortizing loans become the best option. Calculating a comprehensive, cash-flow adapted payment plan for the farmer can become so difficult with conventional calculation tools or spreadsheets, that small agricultural lenders simply cannot easily cater to their clients’ particular needs.

Margill Loan Manager makes lenders’ tasks so much easier with a what-you-see-is-what-you-get approach to creating the payment/amortization schedule based on an predicted cash flow.

We’ve also included an example of a short-term, bridge loans we often see in AG loans.


Example 1: Interest-only during low season with principal and interest during the harvest months

Step 1: Create loan with normal amortization

Let’s say this for only 24 months (could be years, no matter)…

Press on “Compute’ to create this normal P&I schedule which you can now adapt line by line or in bulk.

Step 2: Highlight the interest-only months (lines) and right click:

Step 3: Highlight the principal and interest (P&I) months to fully amortize (0.00 balance).

Get the proposed payment plan in seconds – notice below that the payments for the interest-only months (lines 14 to 20) have been recalculated automatically since lines 9-13 pay off principal thus reducing the accrued interest (this automatic re-computation is called a Line Behavior – a pretty sophisticated feature).

Notice the payment amount for line 1 (479.88) is higher since payment was over 1 month after the origination date (what is called a long period).

Example 2: Higher set payments during the high cash-flow months and normal amortization during the slow months

Once the preliminary schedule is calculated:

Highlight high revenue months, right click – let’s say the farmer can pay 4000 per month during these 5 months of the year. Margill will ask you to enter the payment amount for the selected lines.

Now select the remaining P&I lines and compute the payment to produce a 0.00 balance:

The resulting payment plan:

Example 3: Over time payments were made, missed and late, fees were automatically added and so another 6 payments are added to the loan as well as a new 20,000 loan approved on April 12, 2021

We first inserted a new line  – line 19 below – with the right mouse click or the  button in which we entered the 20,000 loan (called an “Add. Principal (Loan)” type transaction).  Then we added the 6 extra payments at the end of the schedule:

The payments after the 20,000 loan are then re-amortized (could have been special  lump sum payments in there too):

Below is the schedule containing the past payments and the future expected payments to fully amortize the loan that now stretches on to May 2022:

 

Example 4: Bridge loan to help farmers who are expecting to receive a state or federal grant. The grant only comes in (paid by the government) after the project is completed. Interest can be charged normally or a simple Fee charged since interest may be too low for 2-3 month loans.

In this example, we have a 10,000 loan for approximately 3 months (we estimate payment on August 1 – date can change later on):

The preliminary result after Compute:

I then must add my Fee (200) – I can add either a fee or consider this fee to be interest. You have both options in Margill with Line statuses.

Press on  to insert a line (or right click with the mouse):

Fees could be paid up front:

Or paid at the time of full repayment on August 12 for example (for accounting purposes, Fees must be paid separately from the principal so they are properly accounted for):

Some would like to consider the 200 as  interest so we use a Line status called “Interest Charged” and this shows in the Accrued Interest column:

We can split the payment in two or could have one payment of 10,200, no matter (either way, payment will automatically post 200 to interest first and 10,000 to principal):

or


As a agricultural lender you run into other scenarios? Please let us know and we’ll add to this blog! Write to support@margill.com or call at 1-877-683-1815 or 001-450-621-8283 and talk to Marc.

Is there an Alert that we can add that will pop up when we attempt to add more principal than what we have set as the maximum credit?

Q:  Is there an Alert that we can add that will pop up when we attempt to add more principal than what we have set as the maximum credit?

A: Yes, this is called a Conditional Alert.

In the Main window go to Tools > Settings > Set Alerts > Conditional:

When the window opens, click on “New” and the window below will appear allowing you to name the Alert and its condition.

Your condition is quite simple: warn the user when Initial Principal + any additional Principal (as a Line status) added is greater that the amount entered in the Maximum Credit field. Go to the themes on the left to get the proper fields.

You then enter the message that should be displayed to the user when this condition is met.

Save the Alert and you will get back to the list of Conditional Alerts page. Highlight the newly created Alert (the one in blue) and press on both buttons: Apply to existing Active Records and the Apply to Records as they become Active.

You could also use Custom fields for extra criteria and even Equations to, for example, “add these 4 fields” that must be less than this other field.


Now, in this example, we have Credit limit of 2 million and the user tried adding another million to the existing 1.5 million and got this warning when saving…

Another maximum credit tool allows you to set a maximum by Borrower – this is useful if a Borrower has multiple loans in the portfolio: