What Is Loan Payment Identification?
Loan payment identification refers to scanning bank statements for recurring withdrawals linked to loans or advances. In MCA and small business lending, these payments reduce available cash flow and often indicate that a business already has financing in place.
This detection usually appears during the scrubbing stage, when outgoing transactions are parsed into categories. Operators use it to confirm whether applicants are already repaying other debts, which can change appetite and underwriting decisions.
How Does Loan Payment Identification Work?
Loan payment identification is carried out by reviewing transaction histories and spotting repayment flows.
- Transaction parsing: Bank statements are analyzed for outgoing payments with lender descriptions or ACH debit codes.
- Pattern recognition: Recurring amounts and regular timing are flagged as loan repayments.
- Context validation: Payments are matched against known funder or lender names to confirm debt obligations.
- Risk output: Identified loan payments are flagged as existing debt that reduces eligibility.
In Heron, loan payment identification is automated through scrubbing.
- Automated parsing: Bank statements are ingested and transactions categorized by type.
- Loan detection: Heron spots repayment flows that indicate existing debt.
- Structured outputs: Results such as payment amounts, frequency, and lender names are written into CRM fields.
- Next action: Submissions with active loan repayments are flagged for underwriting review or marked as out of appetite if they exceed thresholds.
This gives funders an instant view of whether applicants are already carrying debt, without manual inspection.
Why Is Loan Payment Identification Important?
For brokers and funders, loan payment identification is crucial because it reveals whether applicants have repayment obligations not disclosed upfront. Businesses with existing loans may appear eligible, but in reality, they may not have the capacity to handle additional funding.
By automating this process, Heron reduces the risk of missing hidden obligations, improves decision accuracy, and saves underwriters time in reviewing statements.
Common Use Cases
Loan payment identification is used in MCA underwriting and risk management.
- Flagging applicants already repaying other lenders or MCA providers.
- Identifying repayment flows that suggest stacked advances.
- Writing repayment details into CRM records for underwriter visibility.
- Screening out applicants whose repayment burdens exceed appetite rules.
- Escalating high-debt applicants for manual exception review.
FAQs About Loan Payment Identification
How does Heron detect loan payments?
Heron parses outgoing bank statement transactions and identifies recurring payments tied to lenders or MCA providers. These are logged as structured CRM fields.
Why is loan payment identification important for funders?
It helps avoid funding businesses that are already overleveraged. Spotting repayment flows early reduces default risk and ensures appetite rules are applied consistently.
What outputs should teams expect from loan payment identification?
Teams receive structured fields showing payment frequency, repayment amounts, and lender details. This makes existing obligations visible during underwriting.