Collateral Management

Credible Collateral Management is critical to the lending process.

 

Collateral management refers to the process of managing and monitoring the assets that are pledged as collateral to secure a loan or other type of financing. Collateral management is a critical component of lending, as it helps to ensure that the lender has a sufficient level of protection in the event that the borrower defaults on the loan.

The process of collateral management begins with the identification and selection of the appropriate collateral. This typically involves an assessment of the value, liquidity, and risk of the collateral. Once the collateral has been selected, the lender will establish a collateral management program that includes procedures for monitoring, valuing, and maintaining the collateral.

The lender will also have to establish procedures to ensure that the collateral is properly maintained and insured. This may include regular inspections and appraisals of the collateral, as well as the maintenance and replacement of any damaged or worn-out assets.

Collateral management also involves monitoring the performance of the borrower and managing the collateral in the event of default. This may include taking possession of the collateral and liquidating it to recover the outstanding loan amount.

Collateral management is typically managed by the lender or a dedicated collateral management team. The use of technology such as collateral management system (CMS) is becoming more common in order to automate the collateral management process and to improve the efficiency and effectiveness of the collateral management program.

For over 40 years, EDS’ Lending Compliance Systems® Group has provided the complete spectrum of collateral management and risk-mitigation life-cycle services across all asset classes, real and moveable, tangible and intangible, throughout the lending relationship to financial institutions, asset-based lenders, leasing companies, private-equity firms, and myriad other secured creditors, investors, and stakeholders throughout-the-world.

Our Collateral Management and Risk Mitigation suite-of-services include Feasibility Studies, Pre-Funding and Transactional Due Diligence, Collateral Asset Inspections/Tagging/Cataloging/Appraisals, Site/Risk Assessments, Account Monitoring, Project Management, Environmental Compliance Reviews, and Periodic Onsite Exams and Audits.

Our multidisciplinary compliance examiners and site-specific specialists work closely with the client to analyze and determine its institutional and regulatory requirements. After goals and objectives are established, our compliance teams prepare comprehensive protocols, develop account and site-specific strategies, and visit the borrower’s location(s) to identify, tag, and document collateral assets, and we pair this knowledge with the direct asset recovery experience of our commercial/industrial disposition experts. We meet with borrowers and site management personnel to communicate the level of compliance its lender requires in a courteous and professional manner that leaves no room for interpretation.

EDS’ distinctive collateral management programs and services reduce risk and bring our clients the safety, comfort, flexibility, and confidence to increase credit to existing customers and to seek out and book new business opportunities where others cannot.