Structuring Your Lending Programs

For each product in your lending portfolio, you will need to do a one-time setup in Canopy.

Generally, Canopy's Create Product functionality is dynamic enough to support most lending programs; however, it does require some expertise in understanding what kind of product construct you intend to create, and how it corresponds to Canopy's configurable parameters.

Recommended Approach

Our recommended approach is to send our team a copy of your Loan Agreement template, which we can then map to the configurations in Canopy's system needed to achieve the intended loan lifecycle activity.

Alternative Approaches

However, you may fall into one of two categories:

• Still exploring how you want to structure your Loan Agreements
• Prefer to configure your product constructs within Canopy on your own, following our documentation

In either case, you'll need to think critically about what the borrower's lifecycle will look like in Canopy.

While most of our configurations have default settings that can be leveraged for most users, as your program becomes more powerful and dynamic, you'll need to understand how product configurations impact a loan.

In general, here are a few basic loan characteristics you should consider:

• How long would you like loans to last?
• What loan sizes make sense for your portfolio?
• Does your lending program employ revolving structures, installment structures, or a combination of the two?
• How would you like interest and fees to accrue?
• What is your business model? How do you plan to make margins on your product?
• If any, what payment or issuer processor does your business use? Would you prefer to interface with these directly through Canopy, or outside of Canopy?

Risk-based Pricing and Individual Account Configurations

Beyond your general product construct, you may want to apply certain risk-based factors that could vary from borrower to borrower.

Canopy is fully flexible on risk-based configurations; however, from an operational perspective, it makes sense to think of factors such as the following:

• What credit limit range makes sense for target borrowers enrolled in each product in my portfolio?
• What interest rate range makes sense for target borrowers enrolled in each product in my portfolio?
• Do my borrowers on installment or BNPL plan have varying loan durations?
• Do my fees on this product structure vary from borrower to borrower?
• From a debt facility perspective, do my accounts correspond to different borrowers?

Growing Your Lending Programs Over Time

As you expand your lending programs, you can write scripts to migrate your existing accounts from one program to another.