Managing the financial risks associated with a loan portfolio is crucial to the success of any program, particularly in today’s economy.  Freedom Services' professionals are experienced in analyzing our partners’ exposure and managing the instruments that have been put into place to minimize the deviation between the funding and borrower rates.  Components of this process include: 

• Programs that monitor fixed rate loans to determine if swaps should be put in place to protect against interest rate risk.

• Competitive bids are obtained from designated counter-parties prior to placing swaps.

• Swaps are tied to specific loans.

• Periodic evaluations are completed to determine when swaps need to be placed or unwound based upon loan activity.

• Settlements are automatically calculated based upon the appropriate index for each of the individual swaps.

• Amortization and payment history is maintained for every swap instrument.

Freedom Services recognizes that cash and how it is utilized is extremely important to the successful operation of every loan portfolio. Our team of professionals work with our partners to ensure that cash received is applied in accordance with each program’s underlying documents and that guidelines are in place so that available cash is never left uninvested.  Services available to our partners include the following:

• Cash accounts are monitored several times during the day and bank reconciliations are completed on a monthly basis.  Any variances are immediately researched and resolved.

• Funds are transferred between the various cash accounts in accordance with program documents.

• Funds received from borrowers are posted upon receipt.

• As permitted by the governing documents, cash will be moved between the various accounts maintained by the Collateral Agent and/or Custodian in an effort to maximize the return on your assets.

Freedom Services’ team of professionals is experienced in developing and managing a diverse number of financial vehicles and will assist you in putting a funding mechanism in place that enables your program to meet and exceed its defined objectives.  During the day to day management of these instruments, Freedom Services provides its partners with:

• Proprietary systems that monitor a variety of funding instruments including but not limited to bank loans, commercial paper, medium term notes and asset backed securities. 

• Freedom Services’ professionals coordinate the placement of commercial paper with one or more of the dealers that have been designated to support your program(s). 

• Interest/discount is accrued on a daily basis. 

• A tracking system is utilized to ensure that payments are made as required and that maturities are distributed in accordance with the unique guidelines that have been put in place for each of our partners’ programs. 

• Effective dates of loan and/or backup facilities are maintained in the system to prevent the issuance of debt outside of the program guidelines. 

• Our team will prepare and process any documents that are required to draw on a bank line. 

• Freedom Services encourages the periodic review of all funding protocols in order to effectively incorporate program changes as well as to address the impact that changes in the economy can have on a loan portfolio.

Freedom Services works with each of its partners to develop customized reports that address the specific needs of each management tier.  From high level operation reports that are distributed to Board members to detail transaction reports that are used to monitor daily loan activity, our accounting professionals are skilled in compiling comprehensive information that is targeted to a specific audience.  While the number and types of reports that are prepared vary by loan portfolio, some of the traditional reports/analysis completed include:

• Daily compliance reports designed to satisfy the reporting requirements detailed in the underlying documents.

• Funding costs are compared to LIBOR and/or indices that may more closely match a particular program structure.

• Objectives of a pricing structure are analyzed in comparison to actual results and changing economic conditions. This analysis can be completed for an entire loan portfolio or a specified subset and is particularly useful when establishing pricing criteria for new loans.

• Analysis of the impact that changing economic conditions could have on floating rate loan products.

• Monthly/quarterly performance reports are designed to fit each of our partners reporting structures.

• Preparation of presentations for management and/or Board of Directors’ meetings.

• In addition to a large selection of standardized reports, a wide range of ad-hoc reports can be produced or modified to satisfy your specific reporting requirements.

Freedom Services' accounting professionals have worked closely with our partners' audit firms to develop interim and period end reporting that is informative, GAAP compliant and responsive to the requirements detailed in the underlying documents. The active involvement of our accounting team in the coordination of the annual audits of our partners' programs has both streamlined the process and resulted in the significant reduction of audit fees. Services offered to our partners include:

• Individual corporate and consolidated unaudited interim financial statements produced on a monthly or period end basis. 

• Interim schedules are completed and submitted to the audit team upon request. 

• Coordination of the annual audit includes the preparation of required audit schedules and confirmations.

• Timely response to all audit requests and the submission of supporting documentation.

• Year-end financial statements, supporting schedules and footnotes are submitted to the audit committee for comments and review. All comments and recommended changes received from the auditors are discussed with your program's audit committee and management team prior to being incorporated into the financial statements.

The integration of information from a variety of sources into a program’s financial reporting system is essential to providing accurate and timely results.  Freedom Services utilizes a sophisticated general ledger system that is both flexible and capable of accepting data from a number of different mediums. Typical services provided to our partners include:

• A chart of accounts that is designed to support the operating structure and reporting requirements for each of your programs.  

• The general ledger system provides multi-currency functionality in addition to a tiered reporting structure that captures budgeted and actual results at the program and/or loan product level. 

• Transactions are posted on a daily/weekly basis with automated feeds of activity from the loan systems.

• All accounts are reconciled on a monthly basis with variances documented, resolved and communicated to the designated individual(s) within each of our partner’s organizations.

• A wide range of standardized and ad-hoc reports can be produced to meet the specific needs of any program.  In addition to hard copy or electronic versions of these reports, the underlying data can be downloaded into Excel or a number of other reporting software products.  

• Historical information from outside sources can be converted and loaded into the general ledger system so that year to year comparisons can be completed.

Crucial to the success of any program is the accurate projection of revenue and expenses. Freedom Services' team of accounting professionals has extensive experience in this area and works with our partners to build projected expenses into the loan pricing logic so that the targeted net income is achieved. Components of this process include:

• Annual line item budgets prepared based upon historic costs combined with anticipated changes in the current economic conditions and/or program characteristics. Communication during this process is imperative to ensure that projected loan volume and related funding costs are accurately reflected in the budget. 

• The final budget will be updated throughout the year to incorporate significant changes that are made to the program. 

• On a monthly basis a comparison of actual and budgeted results will be completed with a detailed explanation of why any variances in excess of a predetermined amount have occurred. 

• A bi-monthly analysis of the pricing logic will be completed to evaluate whether the revenue being generated is sufficient to cover both actual expenses and the desired profit.