Protection in the event of an emergency
As a back-up servicer, we stand ready when a credit process fails and lease or loan payments can no longer be collected. If, in a crisis situation, operation is no longer possible in any other way, LOANCOS takes over parts of the operational business and thus ensures that payments are received.
For this to work smoothly, good preparation is necessary. Therefore, LOANCOS’ back-up servicing is divided into three phases:
1. set-up: precautions for the case of emergency
Together with the financial institution and/or the servicer, we define the scope and framework of the back-up servicing and make the appropriate preparations.
2. stand-by: stand by, test, adjust
We stand by to take over servicing at any time. This includes regularly testing the emergency on certain key dates and adjusting our systems and capacities if necessary.
3. back-up servicing: ensure continuous processing
In the event of a crisis, LOANCOS steps in as a servicer to ensure that payments are received and business operations can continue.
- experienced back-up servicer
- Cash flow hedges
- tailor-made services
- Fast takeover of servicing in the event of a crisis
- better evaluation of your company
Back-Up Servicing: Investors’ Favorite
Loans, leasing, rent: Anyone who invests in receivables must hedge – even in the event that the servicer for these receivables defaults. For this reason, cooperation with back-up servicers is particularly widespread in ABS structures (asset-backed securities) as well as securitizations. The focus here is on,
- ensure the flow of funds and
- to give market participants certainty of action within the scope of their transactions,
- if the person who handles the business in non-crisis periods is unavailable.
Rating agencies reward the establishment of back-up servicing and give better ratings to companies and securitizations that have appropriate contingency protections in place.
“Back-up servicing is like a double bottom for payment flows. We step in if the servicer fails. This ensures business operations even in the event of a crisis.”
Lars Schröter, Group Head Market Development of the LOANCOS Group