Abstract:
An apparatus and method for securing financing for a loan is provided. The apparatus and method include a loan request input module for receiving a request for the loan from a borrower. A processor is connected to the loan request input module for processing the request for the loan. A credit evaluation module is connected to the processor for determining a credit evaluation of the borrower based on the request for the loan. A loan determination module is connected to the processor and receives the credit evaluation. The loan determination module determines a first status of the loan based on predetermined criteria wherein terms of the loan are provided to the borrower when the first status has been determined. A financing solicitation module is connected to the processor for soliciting financing for the loan from investors when the first status of the loan has been determined.

Description:
BACKGROUND OF INVENTION  
         [0001]    The present invention relates to an apparatus and method for securing financing and managing repayment of a loan and more particularly to an apparatus and method for securing financing for a loan by soliciting financing for the loan after a borrower makes a request for the loan.  
           [0002]    Typically, a loan organization involves a large physical plant investment, such as, for example, part of a bank. The loan organization also involves various overhead operating expenses such as, for example, a prodigious array of accounting forms, a large personnel staff, a security depository for funds and various fund transfer mechanisms. These overhead expenses associated with running such a loan organization is significant. In addition, these overhead expenses become a barrier of entry to the marketplace and a barrier to profits for any organization that is not willing to make a sizable investment. The overhead expenses of traditional loan organizations are also passed on to loan customers via the assessed interest rate. Therefore, a desire exists to reduce the overhead expenses associated with a conventional loan organization.  
           [0003]    Further, conventional loan organizations secure funding for loans before a borrower requests a loan. The loan organizations then apportion the pre-existing fund for the requested loan based upon various loan criteria. This conventional method of financing loans requires a large amount of funds to be on hand and waiting for loan requests. As such in conventional loan organizations, the requirement of a large amount of funds being on hand and waiting for loan request is also a barrier of entry to the marketplace for any organization unable or unwilling to accumulate or commit such funds. Thus, a desire exists to lower overhead expenses and minimize the barriers of entry to the marketplace. Further, a desire exists to minimize the amount of funds required to be on hand and waiting for a request for a loan.  
         SUMMARY OF INVENTION  
         [0004]    In one exemplary embodiment, a system and method for securing financing of a loan comprises a low overhead, small fixed plant, small workforce, money raising and lending operation. The system and method for securing financing is based on modern high-subscriber presence instruments such as the Internet. The system and method for securing financing has an inherently high flexibility for setting interest rates and profit levels. The system and method for securing financing also allows the public to underwrite and finance loans by contributing small amounts of cash and credit to the system for securing financing, and the proffered cash and credit investments are accumulated until the requested loan amount has been amassed. The system for securing financing also disburses the loan to the borrower who is seeking the loan. The system for securing financing also receives the loan payments and disburses a portion thereof to the investors and/or financing entities. An entity operating the system for securing financing may realize a profit by one or more of the following mechanisms in consonance with applicable Federal and state laws and sanctioned banking and accounting practices. In one embodiment, the entity operating the system for securing financing may charge the borrower an up-front fee for service. In another embodiment, the entity operating the system for securing financing may assess a fee levied on the interest generated by the loan. In even another embodiment, the entity operating the system for securing financing may derive interest on the funds accumulated during the loan amassment period rather than placing the funds in an escrow account. 
       
    
    
     BRIEF DESCRIPTION OF DRAWINGS  
       [0005]    [0005]FIG. 1 is a block diagram view of one representative embodiment of a system for securing financing.  
         [0006]    [0006]FIG. 2 is a networking view of another representative embodiment of a system for securing financing.  
         [0007]    [0007]FIG. 3 is a schematic view of even another representative embodiment of a system for securing financing.  
         [0008]    [0008]FIG. 4 is a flow diagram view of one representative embodiment of a method for securing financing and managing repayment of a loan. 
     
    
     DETAILED DESCRIPTION  
       [0009]    In FIG. 1, one embodiment of a system for securing financing  100  comprises a processor  105  that is connected via an electronic channel  190  to a loan request module  178  that receives a request for a loan from a borrower  300  (FIG. 2). The processor  105  is connected via an electronic channel  190  to a credit evaluation module  176  that evaluates the credit rating of the borrower. A loan determination module  170  is connected to the processor  105  via an electronic channel  190  and makes a determination as to whether a loan should be offered to the borrower based upon, for example, the credit rating of the borrower. In addition, the loan determination module  170  also proposes terms of the loan to the borrower when financing has been approved. The processor  105  is also connected to a financing solicitation module  172  via an electronic channel  190 . The financing solicitation module  172  solicits financing to secure and/or obtain funds for the accepted loan from a financing entity  400  (FIG. 2). In one embodiment, the financing entity  400  (FIG. 2) can also be termed investor. Also, a loan repayment module  174  is connected via the electronic channel  190  to the processor  105 . Once the financing solicitation module  172  has secured financing for the loan, the loan repayment module  174  manages repayment of the loan by the borrower  300  (FIG. 2). In one embodiment, the processor  105  is also connected to a wide area network  180  via an electronic channel  190 . Also, in another embodiment, at least one of the loan request module  178 , loan determination module  170 , the financing solicitation module  172 , the loan repayment module  174  and the credit evaluation module  176  comprise a computer program or software that can be executed by the processor  105  or other systems to perform specifically designed tasks. It should also be appreciated that the borrower  300  can comprise, an individual, corporation or other entity that is seeking a loan. Further, it should also be appreciated that the financing entity  400  (FIG. 2) can comprise an individual, a company, a corporation, a bank or other entity that has the ability to supply the entire amount or a portion of the financing for the loan. In addition, it should also be appreciated that the financing entity  400  may comprise a combination of various entities, such as, individuals, corporations, companies, banks or other entities, that each provide a portion of the financing for the entire loan amount. Also, it should be appreciated that, in another embodiment, the financing entity  400  can comprise, a single individual, company, corporation, bank or other entity, that provides financing for the entire amount of the loan.  
         [0010]    In another embodiment, as shown in FIG. 2, the system for securing financing  100  includes a processor  105  that comprises, such as, for example, a personal computer, a workstation, a mini-computer, a mainframe computer or a supercomputer. The processor  105  is connected to an electronic channel  190  that comprises, such as, for example, a telephone or cable network, an ethernet, a local area network (LAN), or a wide area network (WAN)  180 , an integrated services digital network (ISDN), or a digital subscriber line (DSL). In addition, the electronic channel  190  is connected to various other electronic systems, such as, for example, external memory/storage  110 , printers  120 , other computing devices  116 , facsimile machines  155  or telephone headsets  165 . It should be appreciated that other devices, such as, for example, plotters, synthesizers and speakers, may also be connected to the electronic channel  190 . It should further be appreciated that the external memory/storage  110  can comprise, such as, for example all types of disk drives such as floppy disks, hard disks and optical disks, as well as tape drives that can read and write data onto a tape that could include digital audio tapes (DAT), digital linear tapes (DLT), or other magnetically coded media.  
         [0011]    As further shown in FIG. 2, the processor  105  having monitor  115  is connected to a wide area network (WAN)  180 . In one embodiment, the wide area network (WAN)  180  enables the processor  105  to access or be accessed by other processors, computers and resources on a network such as, for example, a private network such as an extranet or intranet or a global network such as the Internet. In addition, as shown in the embodiment of FIG. 2, the processor  105  connects via the wide area network (WAN)  180  to other computers that are operated by, for example, the borrower  300 , the financing entity  400  and the credit evaluation module  176 . It should be appreciated that, in other embodiments, the loan request module  178 , the loan determination module  170 , the financing solicitation module  172  and the loan repayment module  174  can also be implemented via other computers connected to the wide area network (WAN)  180 . Further, in another embodiment, the electronic channel  190  can also comprise the wide area network (WAN)  180 , and, as such, two separate network connections to the processor  105 , as shown, in FIG. 2, would not be used. In even another embodiment, the electronic channel  190  is connected to a public switched telephone network (PSTN)  198  (FIG. 3). It should be appreciated that the public switched telephone network (PSTN)  198  (FIG. 3) can also comprise a dual tone multi-frequency telephone network (not shown).  
         [0012]    In yet another embodiment, the system for securing financing  100  comprises the processor  105 . In this embodiment, the processor  105  can comprise, such as, for example, a microprocessor, an arithmetic logic unit (ALU) or an electronic computer. An external memory/storage  110  is connected to the processor  105 , and using the external memory/storage  110 , the processor  105  can store and retrieve data or other information. It should be appreciated that, in one embodiment, the external memory/storage  110  can comprise, such as, for example, a random-access memory (RAM) and a read-only memory (ROM) or other types of memory such as programmable read-only memory (PROM), erasable programmable read-only memory (EPROM) and electrically erasable programmable read-only memory (EEPROM). It should also be appreciated that, in another embodiment, the external memory/storage  110  can comprise, such as, for example, all types of disk drives such as floppy disks, hard disks and optical disks, as well as tape drives that can read and write data onto a tape that could include digital audio tapes (DAT), digital linear tapes (DLT), or other magnetically coded media.  
         [0013]    As shown in FIG. 3, the processor  105  connects external data ports  168  that are used to electronically interconnect to specialized networks, such as, for example, the electronic channel  190  (FIG. 2), an ethernet, a local area network (LAN) or other network or peripheral components/equipment. Wide area network (WAN) access ports  167  are also connected to the processor  105  and connect the processor  105  to a wide area network (WAN), such as, for example, the Internet. Also, telephone ports  166  are connected to the processor  105 . In one embodiment, the telephone ports  166  are also connected to a facsimile machine  155 , a telephone handset  165 , a speech recognition system  145 , a voice synthesizer unit  150  and a modem  157 . In one embodiment, a speech recognition system  145  and a voice synthesizer unit  150  allow a borrower  300 , a financing entity  400  or any of the modules  170 ,  172 ,  174 ,  176  and  178  to communicate with the processor  105  via telephone where the voice synthesizer unit  150  generates a facsimile of speech guiding, for example, the borrower  300  to prepare the loan request from the loan request module  178  and the speech recognition system  145  interprets audio responses generated by the borrower  300 . Further, in another embodiment, the modem  157  connected to the telephone ports  166  and the processor  105  also allow a borrower  300 , a financing entity  400  or any of the modules  170 ,  172 ,  174 ,  176  and  178  to communicate directly to the processor  105  via a computing device, such as, for example, a computer. The telephone ports  166  also connect to the telephone handset  165  and facsimile machine  155  such that a human operator  135  can communicate via these devices with a borrower  300 , a financing entity  400  or any of the modules  170 ,  172 ,  174 ,  176  and  178 . Further, the telephone ports  166  are connected to a public switched telephone network (PSTN)  198 . Also shown in FIG. 3, the human operator  135  can operate or interact with monitors  115 , data entry terminals  125  and printers  120  that are also connected to the processor  105 . In one embodiment, a human operator  135  can, for example, receive the request for a loan from the borrower  300 , obtain the credit evaluation, evaluate the credit rating, determine the loan criteria and obtain/secure financing for the loan from all the devices set out above. In another embodiment, the speech recognition system  145  interprets responses entered by the borrower  300  through a key pad connected to a telephone handset  165 . In addition, other devices, such as, for example, external memory/storage  110  can be directly connected to the processor  105 . Also, the credit evaluation module  176  can also be directly connected to the processor  105 . It should be appreciated that, in other embodiments, other modules  170 ,  172 ,  174 ,  176  and  178  can also be directly connected to the processor  105 .  
         [0014]    Also shown in FIG. 4, one embodiment of a method for securing financing for a loan  200  includes receiving a request for a loan from a borrower  300  (step  205 ). In the request for the loan (step  200 ), the borrower  300  can provide information, such as, for example, name, address, social security number, birth date, income, employment history and/or other information. In one embodiment, when requesting the loan, the borrower  300  can use the loan request module  178  (FIG. 1). In another embodiment, the borrower  300  can request the loan by contacting the processor  105  via a telephone port  166  using the speech recognition system  145 , the voice synthesizer unit  157 , the facsimile machine  155  and/or the modem  150 . In even another embodiment, the borrower  300  can request a loan using a telephone port  166  and communicating with a human operator  135  via a telephone handset  165 . When the request for a loan has been received, the credit rating of the borrower  300  is obtained and evaluated (step  210 ). In one embodiment, the credit rating can be obtained by using the credit evaluation module  176  (FIG. 1). In another embodiment, the credit rating comprises a credit report and/or rating from a credit reporting agency. After the credit rating has been obtained and evaluated, a risk level is assigned to the borrower (step  215 ). In another embodiment, the risk level is based, in part, upon an evaluation of the credit rating and/or report and information provided by the borrower  300  in the request for the loan using predetermined criteria. After the risk level has been determined, a decision is made whether to accept the loan request based upon the risk level and proceed with a negotiation of terms of the loan (step  220 ). In one embodiment, the decision to accept the loan request can be performed by the loan determination module  170 . In another embodiment, the decision may be made according to pre-stored risk tables, and, also, the decision may involve the human operator  135  (FIG. 3). If the decision is made not to accept the loan, the loan process is terminated (step  270 ). If the decision is made to accept the loan and proceed with negotiating terms of the loan, the terms of the loan are proposed to the borrower  300  (step  225 ). It should be appreciated that the terms of the loan can comprise the amount borrowed, the length of repayment, the interest rate, other associated fees and other loan terms. In one embodiment, the terms of the loan can be from a predetermined loan agreement and/or loan repayment schedule, or the loan agreement and/or loan repayment schedule can be prepared by a human operator  135  (FIG. 3). After the terms of the loan have been presented, a determination is made whether the borrower  300  accepts the terms of the loan (step  230 ). If the borrower  300  does not accept the loan terms, the loan terms can be negotiated (step  235 ) and new terms can be presented to the borrower  300  (step  225 ). If negotiated terms are not acceptable to all parties involved, the loan request can be terminated (step  270 ). When the borrower  300  has accepted the terms of the loan, the terms are posted (step  240 ) such that a financing entity  400  can view the terms of the loan to determine if the financing entity  400  should provide funding for the loan. In one embodiment, the financing solicitation module  172  (FIG. 1) posts the terms of the loan. Further, in another embodiment, the terms of the loan can be posted on the wide area network (WAN), such as, for example, the Internet.  
         [0015]    When the terms of the loan have been posted, the loan is assigned a time period to solicit public subscriptions. The time period to solicit pubic subscriptions is presented as a term in the loan agreement presented to the borrower  300 . In one embodiment, the solicitation of public subscriptions comprises soliciting financing from financing entities  400 . In this embodiment, each subscription can have a predetermined monetary amount, and the financing entity  400  can fill and/or purchase all or any number of subscriptions. The financing solicitation module  172  can, in one embodiment, perform the solicitation of public subscriptions. In another embodiment, the solicitation of public subscriptions can be performed by posting subscription information on the wide area network, such as, the Internet. Further, when the financing entity  400  fills or purchases a subscription, the financing entity  400  also agrees to terms of a subscription agreement. Once the public subscriptions are solicited, a determination is periodically made whether the total amount of subscriptions has been filled (step  245 ). In one embodiment, filling the total amount of subscriptions can comprise obtaining funding/financing for the full amount of the loan by, for example, filling or purchasing all or a remainder of the subscription that are available. The determination of whether the total amount subscriptions has been filled can be made on a predetermined time basis, or the determination can be made whenever a subscription is filled and/or purchased. If the subscription has not been filled, a determination is made as to whether the subscription period has expired (step  250 ). If the subscription period has ended without filling or purchasing the entire amount of subscriptions, the loan subscription and/or the loan agreement is terminated (step  270 ). Further, any public subscriptions that have been purchased and and/or funds that have been transferred are returned to the financing entity  400  according to subscription terms. In one embodiment, the loan may be re-posted for subscriptions after the first subscription period. If the subscription period has not ended, the terms continue to be posted until the subscriptions are filled or until the subscription period ends. If all of the public subscriptions are filled within the subscription period, the loan is executed (step  255 ). In one embodiment, a certification of acceptance of terms by the borrower  300  is completed. In another embodiment, the borrower  300  completes the certificate of acceptance via an electronic signature method over the wide area network (WAN), such as, for example, the Internet. Once the borrower  300  has completed the certificate of acceptance, the loan then passes to repayment and apportionment (step  260 ). In one embodiment, the loan repayment module  174  (FIG. 1) performs the repayment and apportionment of the loan. During repayment and apportionment, loan payments are collected from the borrower  300 . Further, in one embodiment, the loan payment is certified, and distributed to the financing entities  400  that purchased public subscriptions. In addition, the entity that is running the system for securing financing  100  (FIG. 1) also collects a fee for service from the repayment of the loan by borrower  300 . Such a fee collected by the entity running the system for securing financing  100  is presented as terms in the loan agreement with the borrower  300  and subscription agreement with the financing entity  400 .  
         [0016]    The foregoing discussion of the invention has been presented for purposes of illustration and description. Further, the description is not intended to limit the invention to the form disclosed herein. Consequently, variations and modifications commensurate with the above teachings and with the skill and knowledge of the relevant art are within the scope of the present invention. The embodiment described herein above is further intended to explain the best mode presently known of practicing the invention and to enable others skilled in the art to utilize the invention as such, or in other embodiments, and with the various modifications required by their particular application or uses of the invention. It is intended that the appended claims be construed to include alternative embodiments to the extent permitted by the prior art.