Loan Matching System Using Profile Compatibility
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Solution Overview
Problem
Small businesses face difficulties in securing loans due to lenders' unique requirements and uncertainties, making it challenging for them to find suitable financing options, especially during economic downturns or natural disasters.
Innovation Solution
A method and system that identify and match business entities with compatible lenders by creating and enhancing borrower and lender profiles, using electronic data from financial management systems, and processing unspecified lending criteria through digital signatures and cryptography, while providing a dedicated communication channel and aggregating commitments from multiple lenders.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If lenders use unique requirements and strict criteria for loan approval, then lending risk is reduced, but loan accessibility for small businesses deteriorates
Solution Approach 1:
The patent segments the loan application process into multiple independent components: borrower profile creation, lender profile creation, compatibility determination, and commitment aggregation. This segmentation allows each component to be optimized independently - strict criteria can be applied in compatibility determination while the overall system remains accessible through multiple lenders and flexible profile matching.
Solution Approach 2:
The patent creates universal profiles for both borrowers and lenders that can be used across multiple lending scenarios. These profiles serve multiple functions: they enable compatibility assessment, facilitate matching with multiple lenders, and support both automated and manual review processes. This multi-functionality allows the system to maintain strict lending criteria while adapting to various business needs and lender preferences.
2Reliability
If businesses conduct exhaustive search to identify the right lender, then loan suitability is improved, but operational efficiency deteriorates
Solution Approach 1:
The patent performs preliminary actions by automatically creating borrower profiles, identifying multiple compatible lenders, and determining compatibility scores before the actual loan application process. This preliminary matching reduces the need for exhaustive searches by pre-filtering suitable lenders based on profile compatibility, allowing businesses to quickly identify appropriate financing options without manual research.
Solution Approach 2:
The patent implements feedback mechanisms where compatibility determinations are communicated back to borrowers, showing which lenders are most suitable based on their profile. This feedback guides borrowers toward the most appropriate lenders without requiring them to conduct exhaustive searches, improving both loan suitability and operational efficiency by directing attention to the most promising options.
3Reliability
If lenders impose multiple criteria and covenants, then loan safety is improved, but application complexity deteriorates
Solution Approach 1:
The patent introduces an intermediary system that acts as a mediator between borrowers and lenders. This intermediary automatically manages the complex criteria and covenants by embedding them in the lender profiles and compatibility determination logic. Borrowers interact with a simplified interface that automatically handles the complexity of multiple criteria, while lenders maintain their safety requirements through structured profile definitions.
Solution Approach 2:
The patent transforms complex lending criteria into standardized profile parameters that can be automatically processed and compared. By converting covenants and requirements into structured profile attributes with associated weights and thresholds, the system maintains loan safety through rigorous criterion evaluation while presenting a simplified application experience to borrowers through automated parameter matching.
Data Source
AI summary
Methods, systems, and articles of manufacture for fulfilling a loan request of a business entity. Embodiments are utilized to identify or receive a loan request from the business entity, identify or create borrower and lender profiles, and match the loan request for the business entity using compatibility criteria included in or associated with the profiles. Certain profiles may be created using electronic data from financial management system, and such data can be verified by the financial management system. Borrower-lender compatibility results can be displayed to lenders or business entity for review. A single lender may commit to fund a loan, or respective lenders may commit to fund respective loan portions, which may be presented to the business entity.