Debt management software helps businesses raise debt from institutional investors to fuel working capital, business operations, and re-lending and reinvesting endeavors while managing the debt for both parties. Every debt transaction has three phases: due diligence, structuring, and post-deal monitoring. Debt management software plays a crucial role in managing the debt raised in the debt maturity curve, i.e., drafting the rules of credit agreements, tracking the rules, managing covenants, sending paperwork at the right time, ensuring that the conditions of credit agreements are met, and so on. Debt management solutions are primarily used by fintech firms and finance teams to streamline tedious and monotonous tasks such as generating reports, maintaining a ledger for the payment waterfall, due diligence documentation, and other tasks concentrated on the quantitative side. Most debt management software buyers are borrowers, lenders, banks, investors, and financing and insurance companies.
Lenders and investors use debt management software as part of a set of portfolio management software to monitor and track their investments, calculate credit risks, and perform debt analysis. Whereas it is used by borrowers to manage payments, monitor collateral, and track covenants. It is also used by specialized finance, real estate, e-commerce, and retail companies.
To qualify for inclusion in the Debt Management category, a product must:
Monitor and track negative and affirmative covenants to examine credit quality and potential risks of the portfolio
Perform collateral tracking for underlying assets
Generate payment schedules, which include tracking and automated reporting
Conduct verification and KYC of the borrowers, which includes credit risk and cash flow management, by integrating with the data warehouse of the borrowers
Perform debt analytics and have capabilities of automated reporting across credit and debt portfolios
