Why do loan tapes matter?
As we covered previously, a loan tape is a snapshot of a fintech's customer base and outstanding balances, as well as other information on customer characteristics (e.g., geography, industry, FICO scores, etc.), receivable characteristics, and risk data.
In the context of fintech data and debt capital, you'll also hear loan tapes called servicing tapes, collateral feeds, and loan exposure tapes. Loan tapes matter because they're often a reporting requirement for fintechs seeking to raise and manage debt capital as they scale.
In this post, we'll walk you through Finley's consumer fintech loan tape template and point you towards resources that can help you accelerate your debt capital raise and management.
Where can I find a loan tape template?
When fintechs seek to secure a credit facility from lenders, they must generally produce a loan tape for prospective lenders as part of the capital raise process. To view a loan tape template that shows some of the data fields that capital providers typically expect to see, download Finley's Loan Tape Template PDF here.
As you can see from the PDF, loan tapes contain both receivable characteristics and customer characteristics. Examples of receivable characteristics might include a customer ID, repayment start and end dates, amount outstanding, and remaining term. Examples of customer characteristics (for a consumer fintech) might include cohort, geographic, and credit score information.
While your loan tape won't look identical to the template file, you can use Finley's consumer loan tape template to get a sense of any gaps in your current data availability or reporting capability. A consultation with our team of debt capital data experts can also help you identify the best loan tape format for your specific capital markets needs.
What are other aspects of capital provider diligence?
Debt capital providers want to minimize investment risk and ensure that their investments will be repaid, so they spend a lot of time during the debt capital raise process making sure that they understand a borrower's business history, standard operating procedures, and business model. Examining a loan tape template is an important part of that process.
It isn't just loan tapes that capital providers they want to see, though; over the course of the debt capital due diligence process, corporate borrowers might be asked to provide everything from tax returns to a list of technology vendors to a customer reference list.
While different debt capital providers will ask for different types of information, their requests can generally be bucketed into one of four categories: company overview information, financial information, customer or policy information, and historical data. For more on capital provider diligence, check out our previous overview of capital raise diligence.
Want to learn more?
Putting together a comprehensive loan tape or servicing tape is an important first step in raising debt capital. After you've successfully raised debt capital, though, you'll need to provide an updated loan tape or servicing tape each time you want to draw from your credit facility or prepare regular reporting for your capital provider. If you're interested in learning more about software that can help you streamline your debt capital raise and management, just schedule a demo or take a self-guided product tour of Finley. We'd love to chat!