The New Way to Service Loans and Collect Automated Payments

Loan servicing functions include collecting monthly payments.

In this article, I wanted to share something we did today because My one friend wanted to give me a quick walkthrough of the latest big software service that he’s bringing to the market which is called geek patio and the thing that makes this special is that it’s an online a cloud-based payment processing software that not only handles like the bookkeeping aspect and the journal entries and the amortization tables and all that stuff.

It also allows you to accept fully automated payments through both ACH and/or credit cards and another thing that makes it really really cool as you can see in this video is that it actually allows you to tie multiple credit cards and or ACH accounts to each borrower, so you know say if a borrower misses a payment because they don’t have funds in their bank account you know it would then go to hit their credit card and if that credit card fails it could go and hit the next credit card has to have a third one there, so it’s just kind of a really thoughtfully designed software where I think they just kind of went at it with a mindset of eliminating a lot of the problems and frustrations.

Cloud-based payment processing software

That had just always been there for this kind of you know loan servicing payment processing software I think I think they’ve really done a pretty good job at it and it’s a really easy to use website it’s not hard to figure out what to do or where to go so anyway without saying anything more I’m just going to jump into the video recording of me and mark talking back and forth about the website and how it works. If you’re like a landlord and you want to collect recurring payments or if you need to collect reoccurring payments for anything for that matter.

Settings And Creating Accounts

So first thing you’re going to do is click create account okay, and then you’re going to put in your information, and you’re going to sign up as a lender right yep you got it, and then you’re going to agree on the Terms of Service and submit and then you’re going to get your login and when you log in the very first thing. I wanted to do Seth is click on your name or score or hovers over your name. So when you do that, you’re going to go to settings, and you’re going to go to merchant accounts okay, and this is where you’re going to set up automating getting paid. So when you click merchant accounts. I wanted to go over here to add a merchant account. You see that all these stripes we pay blue pay are for credit cards connect them is for ACH. So when you go through that, you’ll go through each company’s process as far as getting merchant approval right, and they’re all different.

Now we’ll. Eventually we’ll have something that kind of gives you know to compare and contrast on other merchants, but in your situation, I would start with blue pay for credit cards and act them for ACH. We are also adding this week, so if stripe, which is like the easiest to get on kicked you off, you just go to a different one right. If we pay kicks you off, you go to blue pay blue pick you up good off eyes on that right. So we’re going to come merchants agnostic right act them happens to be the only bank in the country that does consumer lending they completely understand our business. They are the most solid way of getting paid. So now, once you do that, what we’re going to first do is we got to get our down payment.

So we click on down payments, and we hit new down payment you’re going to say Seth are a tipster test and how much are the down payment before let’s say six thousand bucks so six thousand okay and then this is really important right here we need to connect the correct merchant account so you click here, and you connect your merchant account to collect the wheat the 6000, so I might do we pay or stripe so let’s just do we pick right hit create once that’s created you’re going to hover over your name, and you’re going to click on it you see that so click on it and you click copy link copy to clipboard, and then you’re going to go to a new tab and paste that link, and you’re going to either hyperlink this on your website where you’re going to email this to your borrower, and they’re going to complete their information.

Now that should all actually auto-populate into our service, but let’s just pretend that it doesn’t so you get your down payment, and then we’re going to set up our first loan. So we’re in a go-to loan portfolio, and you’re going to go here new loan. You see that yes, I noticed we pay in stripes. I’ve heard from both of them that you can’t use them for real estate is that we have to have some way of getting around that or well, you can use it for down payments right. So I’ve used stripe for years without issue for down payments now my monthly payments.

I use ACH so yeah technically speaking they don’t love it right so if you do get kicked off of striper or we pay you can go to blue pay and go to alright so you hit me alone, and we’re going to put in Seth tests in the amount should be for how much.

So this is after the down payment and right at B say twenty-four thousand interest rate nine point nine percent nine point nine and then are going to be like a bank three-sixty or person 365 mmm I think 360 is usually one of them yep and month term let’s say 60 months and inter start date let’s say May 1 and payment start date will say you June 1 1. Now we have our summary, so we’re getting five 1147 a month over sixty months at nine point nine percent. How long is our great spear you’re going to be for I’m going to leave it? Let’s go to 15 days pretty generous.

There’s a late fee of flat or we’ll make it a flat C and how much 25 bucks and I do 60 days default. I don’t know you what do you want to do. I’ll lose three maybe thirty days, okay awesome. Now it’s really important that we get paid automated. So here’s where we’re going to set up our merchants right. I click here, and for credit cards, let’s do stripe and for ACH.

Let’s do act them now. We’re going to just double-check over here our amortization schedule because when your borrower comes on, they’re going to see something like this. They’re gonna be able to see their amortization schedule. So it’s going to avoid those two annoying phone calls. What’s my current balance. They can make a prepayment this month. The borrower can come in and do it at any time right, the nice thing is the borrower can come in and change their ACH information and their credit card information anytime as well nice so now.

Now, after the down payment, technically speaking, this should autofill except for social. Let’s just put in your information set test. Now we do tests at tests calm now. We do test and test and test and test and then the social. This is going to help you when we get to annual reports we need the social so that our bookkeeper can send out 1098 at the end of the year.

I just want to know how did you know what my social security number was I find that somewhere that crazy Myron yeah are there hit continue and now we’re going to upload here a promissory note our land sale contract and our purchase sale agreement if we’re coming over from simple your screenshot of the current balance from simple should go in here as well.

So that way, when you set up your new loan. You know it’s not starting over from scratch. It’s coming from here to here, and the purple is just so that both the borrower and the lender can reference all the original increments exactly because there’s no ambiguity. So we’ll upload our docs we can do three at a time or four at a time. I mean, you can just do as many as you want it open, and they all upload, and thus there’s no ambiguity. Now we’re going to continue we gotta get our fees even though it’s a set and forget it system there’s always a monthly fee, and this will offset the expense of geek pay so how much are we going to charge our borrower each month let’s say 25 bucks a month 25 it would just say note collection fee and then 2 plus 9, and we get a prorated taxes so what our prorate tax is going to be looks like hundred bucks a month hundred bucks.

I would just say prorated monthly taxes hit the plus sign again are there any other fees. I guess in this example, you can do a three-dollar no whining fee right take the pleasure and then you go back. It’s delete it now. I don’t know about you, but I don’t want to partner with stripe, or we pay or blue pay or authorize net. So I tell all my ball where’s the same thing I get it I want reward points to but if you want to use your credit card. Then we’re going to charge a three percent convenience fee only for credit cards, so hit this little arrow here and we’ll just do for the cards if we want to charge for a CH we can write. I don’t because I want to push him to a CH because a CH is so cheap, like 45 cents to a buck depending on your merchant’s right history. So you hit continue, and we’re going to connect the bank account, and we’re going to connect the card in our agreements we ask for both methods of payment.

They authorize it right. So now we made it foolproof, so we’re not relying on our borrower to fill out this information however if you do have a borrower and see how that looks yeah sure all right so we’ll go back I mean it’s really simple with connect bank account right all this is prefilled for you, and then you put in their phone, and you put the account name the account number the checking account number Acton is going to charge them a dollar because we want to confirm it’s a really good cut count okay and then if it’s an individual or company account right and then we’ll continue there then we’ll go back, and we’ll hit connect card, and we’ll put the cardholder name the number expiration CVV code and hit connect stripe, and that’s it, so we’re hit continue so basically you as the lender can only fill that out.

If they’ve given a team correct now if they haven’t given it to you, they need to fill it out okay in that happens after you invite them the idea correct, so I’ll show you what it looks like okay so hit continue and when we say this is what your borrower is going to see right when I hit Send to borrow for approval they’re going to log in as a borrower, and they’re going to see their loan term summary they’re going to see their amortization schedule.

They’re going to see their fees they’re going to see their transaction fees applied to card they’re going to see their agreements, and they’re going to see their information okay now what’s great about this is they can create a payment themselves at any time when they log in they can also email you say hey Seth discharge me an extra thousand bucks this month, and you can go and do it for them and it takes a second to do but when we hit send to borrow for approval what we’re going to do is we’re gonna go to emails so we can see the email we sent them okay.

It says I added you to loans click on it. It will added you to loan on geek there you can check it out instantly so when they save you this link to access it now this is what they see so it’s really really easy so the borrower flows really nice, so if we go to an actual loan. I guess they hold on just a second when the borrower clicks on this. We have not added an ACH account or credit card yet so where do they go to do the first thing that they would see is add your account that would be the first screen they would see so we go to payment accounts so when they would know this is what they see.

So when they login to say, please connect your bank account your card okay yeah yeah if they want to invite their spouse or their partner to also be able to log in they can do that as well and so what we’ll do is. Let’s just go to an actual loan that’s got some different things going on with it so we can see what it really looks like in real life. It’s going to Nokes and when we click on Nokes. We can see what’s going on with this note right the first thing we can see is all their agreements their information their fees right and all that good stuff we can see how much payments we’ve received.

We can see the scheduled payments the final payment and what their statuses but if we go over here to emails we can see Needham issues right here’s our first notification you’re charged 100 for the loan and then we do fun facts because every time like I get a charge a little sting in my heart so to mitigate this thing we give a little fun fact so if you put a quarter teaspoon of baking powder on our boiling eggs the egg shells will peel off easier thanks for being the kind of person Islands or commitments I appreciate you your the best buy more land right.

So here’s another one a payment $104 is successfully posted for the Doakes loan keep on lending the geek pay team right, so that’s what we get as a notification your loan is in good standing thanks for making your payment your loan is now in good standing thank you again for being reliable borrow is usual fee any questions are always here to help so what happened was.

If Payment Failed

She had a payment fail right says your payment $100 has failed, please log in and try to make another attempt or add a new payment account to put this loan in good standing so that’s you still have time to pay bring your loan in a good standing just click on the following link, and that’s where she would go we will continue charging interest in building as per usual, please make sure to make a payment as soon as possible.

She should never have had a failed account. So we don’t know what happened we go to payment accounts she’s got four accounts on file if the first one fails it charges a second one the second one failed it charges a third one and the third one fails it charges the fourth one right how that happened I don’t know but let’s say Shenandoah caused you success.

I’m sick of getting charged the three percent convenience fee make my ACH the primary all you would do is drag and drop see that and just drag and drop that’s it so she can do that she can add more payment accounts.

If she wants you can do it for we have good math, we look at the journal entries so we can see the principal entry right here’s another payment we can see the penalty fees because she was late here’s her service fees here’s another service fee which you set up act them here’s a penalty fee right another service fee another principal entry so we can see all the journal entries that’s going on proper accounting with her just make sure I understand um I know like in this example we said there was a $6,000 down payment is that payment made like apart from this loan we set up oh yeah because that’s not part of the loan that’s just the down payment to set up the loan okay so right because you’re not loaning that amount now you can show that to the journal entry okay.

So it is known as a journal entry really just for accounting purposes, but it has nothing to do with the payments that are coming in, and out of this loan that’s just like maybe I got it as a cashier’s check or something like that right, and I even start with the first loan payment correct that’s right okay is there any way to make the first payment as part of this thing or is that not yeah absolutely you can have your payment start date whenever you want you can create a payment you can you could charge it you mean you would just have in there like in down payments or create a payment you would just add like the description of what it was like I charge a $4.99 doc fee, just to create a payment doc fee right so we can go in and do that as long as you have permission to do it and when you create a payment does that send it to them for approval or just automatic, so it automatically does it okay yeah so when we go to payments.

we will go to overview we do create a payment I would put the description in here charge Barakat. Leave an explicit approval from borrower right. So there should be some paperwork involved with letting them know. This is what’s going on, so that’s how we do it now we do billing statements very similar to American Express so if I look at your American Express statements exact same thing okay.

This does really good math and then um I said you could edit it if you go to your payments let’s say that she calls up and says hey let’s say you know like we do a 90-day refund policy so first month they call say hey I hate I saw the prop read sucks I want a refund just click on here and you make a refund that’s it comes very easy in your payments you can edit the loan you can stop payments all that good stuff annual reports let’s keep our bookkeeper happy right you just hit download it goes out.

VM Billing Statement

They get all the information for each borrower VM the billing statement part is that like an email it goes out to men where that’s just something they can come in in you at their bacon kids, they come and see their billing statements but after they make a payment okay yeah and then we have emails, and when payments come out they get email just telling them data payment came out that kind of thing exactly okay when you go to settings, and this is where you would set up your email signature I’ll have fun facts for you if you want to copy and paste them, and then you can see your subscription, and it hit your merchant accounts you can see what’s been set up.

The number of loans per account so if I already have like an existing bloop a merchant account can I somehow enter that in or do I have to apply for it no you’ll be able to just it’ll be seamless if I want to not include fun facts with my emails like if I just wanted to sting people and offer them no joy at all is that possible to do that you just don’t put any foot back so okay awesome we have free support you just come over here and click this and hit new conversation it asks your message okay alright so that is a geek pay any other questions nothing I can really think of if you’re going to work with boom pay or stripe or we pay is blue pay the most expensive one like do they have a monthly feed I could I think what the blue pay I can I got to pay like 25 bucks or something per month.

Whether I use it or not, I’m merchants agnostic. I have nothing to do with the merchant fees, so you know depending on where you are if you’re a startup inland we are startup in any business your merchant fees are going to be more because more risk right you don’t have a track record you’ve been doing this for as long as I have you can probably get no fee and 2.2% it just depends on their risk-reward.

If you didn’t want to start setting up a merchant account. I guess you have to with well let’s discuss about that right. So when we first set up that loan we automated it right, but if you remember when we first set it up, we could manually track the loan because you will have people that actually just send you checks or they send you cashier’s checks, and it’s not automated so you just come in here and you hit to create a payment, and you would manually do it, and that’s where you would do it see how I did that turned in the description I might say April payment and process the payment now.

As they process payment here it won’t charge them you know just the math I’ll figure out your principal and interest it keeps transparency, so that’s our journal entry yeah I’ll do the journal entries so everybody knows where they’re at it’s a really ideal but that’s what we can do it’s really all of your seller finance deals whether they’re taking payments out or not this is a good way just to handle the accounting for them right correct okay yeah this is a the only automated financial CRM in the world that I know some say if you didn’t want to accept credit card payments and only ACH payments is there like a merchant approval process you have to go through with is it called actin is epic a yeah absolutely so you know you’re going to have to send two months bank statements you’re going to be bankable.

They won’t check your credit, but if you’ve been to jail, they may not accept you so 99% of our merchants are accepted they understand our business they know our business so it’s not an issue as long as you’re bankable yeah so when you first go to your name, and you hit settings, and you set up your merchant account right here yeah you see that that’s where you’ll go through that process with each merchants attention and you know about how many days it takes them approximately to approve you it takes ten business days.

They’re going to have you fill out paperwork okay video just send them paperwork, but everything is done through geek pay so like when you click on that apply for a merchant account button does that take you to their website and then you do it there or yeah let’s check it out so let’s go add merchant account let’s connect blue pay so now it says to fill out the form to add blue pay right so that cow name account ID see your kid to get requires rentals, please log into your blue pay account and go to admin accounts list options view Kachemak though blue pay, so that does make it pretty easy then feels really easy right it’s nice that’s it that’s awesome man kudos for putting together such a nice system thank you, okay guys, so that was the geek pay walkthrough and before I wrap this up I just wanted to add a few last-minute thoughts before we end this as you probably noticed that video is recorded in April of this year.

So that was a few months ago now since that time I actually applied for an active account I could accept ACH payments I was able to get that approved no problem it was I wouldn’t say it was like the easiest thing that took a little bit of back and forth and was a little confusing, but we did get it done so it wasn’t terribly difficult also since that time they’ve at its as an option here that could be another solid option that I don’t have yet but may be worth keeping in mind also something I was waiting for before I published this video is to see what the pricing of geek pay was going to be just.

I understood you know what’s going to be the cost of maintaining these different merchant accounts in addition to paying for blue pay I can tell you for each one of these blue pay and act them I’m paying 25 bucks a month for each one, so that’s 50 bucks a month right there and then the cost of geek pay you can see right here these are kind of the options if you’ve got 0 to 10 notes that’s probably arrange a lot of people are going to be falling into its 99 bucks a month so you’re basically looking at like 150 bucks a month which I think you can totally offset that by adding you know servicing fees to your loans and that kind of thing but even then say.

I think a lot of that is fair game but just keep in mind if you are using this specifically for real estate just be aware of the rules that come into play with each one of these or whichever one you decide to use so yeah that’s a thing that’s a wrap pretty solid system it’s got a really nice design very easy flow it’s pretty easy to figure out how to use it, and I just thought it was worth telling you guys about so hopefully that was helpful thanks for watching me, and I wish you all the best with your next seller finance deal and if geek day makes sense for you hopefully it works out well for you so thanks for watching talk to you later.