AU2004100765A4 - A method for linking an investor and a borrower - Google Patents
A method for linking an investor and a borrower Download PDFInfo
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- AU2004100765A4 AU2004100765A4 AU2004100765A AU2004100765A AU2004100765A4 AU 2004100765 A4 AU2004100765 A4 AU 2004100765A4 AU 2004100765 A AU2004100765 A AU 2004100765A AU 2004100765 A AU2004100765 A AU 2004100765A AU 2004100765 A4 AU2004100765 A4 AU 2004100765A4
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Description
AUSTRALIA
Patents Act 1990 COMPLETE SPECIFICATION INNOVATION PATENT Applicant(s): Glen Spratt Invention Title: A METHOD FOR LINKING AN INVESTOR AND A BORROWER The following statement is a full description of this invention, including the best method of performing it known to me/us: 2 A METHOD FOR LINKING AN INVESTOR AND A BORROWER Field of the Invention The present invention broadly relates to a method for linking an investor and a borrower. The invention relates particularly, though not exclusively, to a method in which a borrower can borrow money from an investor, such as an individual investor, without the direct involvement of a financial institution. Throughout this specification the term "financial institution" is used for any institution that lends money such as a bank or non-bank lending institution including for example credit unions and building societies. Further, throughout this specification the meaning of the term "investor" includes any person who deposits or wishes to deposit funds.
Background of the Invention Almost everybody has an involvement with a financial institution such as a bank. Financial institutions lend money to borrowers and receive funds from investors. For example, the financial institution may finance a home loan and charge an interest rate. The financial institution typically receives the funds from investors, either directly or indirectly, and pays an interest rate for the received funds. In addition, customers may have an account with the financial institution, such as a bank, and dependent on the type of account, the financial institutipn may pay an interest rate to the customers. In any case, the interest rate which financial institutions charge for loans typically is significantly higher than the interest rate that the financial institution pays the investor or the bank account customer.
54226 3 Summary of the Invention The present invention provides in a first aspect a method for linking an investor and a borrower, the method comprising the steps of: receiving a plurality of requests for loans and for investing funds, the requests being associated with borrowers and investors respectively, providing access for at least one borrower or investor to information related to the requests for investing the funds and/or for the loans so that the or each borrower or investor can consider the information, providing a means for associating more than one borrower with at least one investor or more than one investor with at least one borrower in a manner such that invested funds can be split between the associated borrowers or a loan amount can be split between the associated investors respectively, and providing the or each borrower or investor with a means for indicating that conditions associated with a request for investing the funds or for the loan, respectively, are acceptable, wherein the conditions are at least to some extent determined by the or each investor and the or each respective borrower.
For example, the condition may relate to at least one of an interest rate, a loan amount, a loan repayment, a loan insurance or a loan term or what security is required.
In one embodiment of the present invention at least one borrower is associated with more than one investor and the conditions for one associated investor include an 54226 4 interest rate that is different to that of another one of the associated investors.
In an alternative embodiment of the present invention at least one investor is associated with more than one borrower and the conditions for one associated borrower include an interest rate that is different to that of another one of the associated borrowers.
The or each investor and the or each borrower typically are able to directly review each others request without the typical intermediary, the financial institution. This has the significant advantage that margins of the financial institution can be avoided or reduced and it would be possible for the or each borrower and/or the or each investor to benefit from reduced charges. In this regard, the or each investor and the or each borrower can operate as their own market, independent of any greater funds market.
The or each borrower and investor may be an institution, but typically is an individual investor. In one specific embodiment the condition is entirely determined by the respective investor and borrower.
The method may also comprise the additional step of receiving more than one request from at least one investor or borrower. For example, the or each investor or borrower may reconsider the conditions of their request and post a new request after having reviewed conditions of request associated with other borrowers or investors.
Typically, the method is arranged for operation by an institution for linking a borrower and an investor. The method typically also comprises the additional step of charging a fee.
The method typically also includes steps for effecting at least one of loan or mortgage insurance, 54226 5 preparation of documentation such as loan documentation, issuance of statements, settlement, discharge or enforcement of mortgages and management of loans.
For example, the institution for linking an investor and a borrower may receive a request for a loan from a borrower or a request from an investor for investing funds. After receiving the request from the borrower or investor, the request may then be offered to an investor or borrower, respectively, and the investor or borrower may accept the request or may post a bid for the request.
The information typically includes at least one of a loan amount, an interest rate, a loan duration and loan repayments. The information may also include additional conditions such as requirements for loan insurance.
In one specific embodiment of the present invention the or each investor is associated with an employer and the or each borrower is associated with an employee of the employer. The or each investor typically is the employer and the or each borrower typically is the employee.
The received requests for investing funds typically are posted directly by the or each investor and the requests for borrowing money typically are posted directly by the or each borrower.
The method typically is computer software implemented. In this case the method typically comprises the step of providing access for the or each investor and the or each borrower to a data server such as a data server that is accessible via the Internet. The method typically also comprises the step of providing data to the or each investor and the or each borrower so that the or each borrower and the or each investor can display the information on a computer display. Further, the server typically is arranged to receive information from the or 54226 6 each borrower and the or each investor.
The method may also comprise the additional step of selecting a class for a loan. For example the loan may be classified as a mortgage, personal loan, car loan, or investment loan such as a share loan. The classification may also include classifying the loan in a sub-class such as residential mortgage, commercial mortgage or insured or uninsured mortgage.
The method may also comprise the additional step of assessing a risk associated with a loan and/or providing loan insurance, typically for a fee.
In addition, the method may comprise the step of managing loan repayments. Further, the method may comprise the step of receiving payment from the or each borrower and may also comprise the step of paying loan repayments to the or each investor. In one embodiment the step of receiving payment from the or each borrower comprises receiving the payment by an appointed trustee and the or each investor are repaid from a trustees account.
The present invention provides in a second aspect a computer software supported system for linking an investor and a borrower, the system comprising: a means for receiving a plurality of requests for loans and for investing funds, the requests being associated with borrowers and investors respectively, a means for providing access for at least one borrower or investor to information related to the requests for investing the funds and/or for the loans so that the or each borrower or investor can consider the information, a means for associating more than one borrower with one investor or more than one investor with one borrower 54226 7 in a manner such that invested funds can be split between the associated borrowers or a loan amount can be split between the associated investors respectively, and a means for indicating that conditions associated with a request for investing the funds or for the loan are acceptable, wherein the conditions include an interest rate and the interest rate is at least to some extent determined by the or each investor and the or each respective borrower.
The present invention provides in a third aspect a method for linking an investor and a borrower, the method comprising the steps of: receiving a plurality of requests for loans and for investing funds, the requests being associated with borrowers and investors respectively, providing access for at least one borrower or investor to information related to the requests for investing the funds and/or for the loans so that the or each borrower or investor can consider the information, and providing the or each borrower or investor with a means for indicating that conditions associated with a request for investing the funds or for the loan, respectively, are acceptable, wherein the conditions are at least to some extent determined by the respective investor and borrower such that a margin that is conventionally charged by a financial institution for borrowing or investing funds with the financial institution is at least in part avoided.
54226 8 The invention will be more fully understood from the following description of specific embodiments of the invention. The description is provided with reference to the accompanying drawings.
Brief Description of the Drawings Figure 1 shows a flow-chart illustrating a method for linking a borrower and an investor according to an embodiment of the present invention, Figure 2 shows a schematic of a computer software supported system for linking an investor and a borrower according to an embodiment of the present invention and Figure 3 to 3 show a flow-charts illustrating a method for linking a borrower and an investor according to another embodiment of the present invention.
Detailed Description of Specific Embodiments Referring to Figures 1 and 2 a method 100 for linking an investor and a borrower and a computer software supported system 200 for linking the investor and the borrower according to embodiments of the present invention are now described. In this example the method 100 uses the system 200. The method 100 is operated by an institution for linking the investor and the borrower and brings together borrowers directly with investors without an intermediary financial institution such as a bank.
The system 200 is arranged to receive a large number of requests for loans from borrowers 102 and a large number of requests from investors 104. Borrowers and investors may either directly or indirectly post their requests. This may be conducted using computer terminals 202 associated with the borrowers 102 and computer terminals 204 associated with investors 104. The 54226 9 terminals 202 and 204 are connected, for example via the Internet, to a server 206 operated by the institution for linking the investor and the borrower. The server 206 is arranged to provide access for each of the borrowers 102 to access information related to the requests posted by investors 104. Further, the server 206 is arranged to provide access for each of the investors 104 to access information associated with the requests of the borrowers 102.
For example the server 206 may be arranged so that borrowers 102 and investors 104 can receive data by their terminals 202 or 204 and information associated with the requests, for example an interest rate, loan amount, duration of the loan and type of the loan will be displayed on the screen of the terminals 202 and 204. The borrowers 102 and investors 104 can then view and compare each other's requests and can consider if one or more of them are acceptable.
If, for example, a borrower 102 decides that a request by an investor 104 is acceptable, the borrower 102 may send a message to the server 206 to indicate that he wishes to accept the respective investment request. The institution for linking the investor and the borrower may then effect a settlement between the borrower 102 and the respective investor 104. If requests by borrowers 102 or investors 104 are not acceptable, the respective borrower 102 or investor 104 who posted the request can reconsider the request, for example by comparing the request with that of other investors 104 or borrowers 104, and may post another request that is more tailored to the market's needs.
The server 206 is also equipped with a software routine that allows more than one borrower to be 54226 10 associated with one investor or more than one investor with one borrower in a manner such that invested funds can be split between the borrowers or a loan amount can be split between the investors respectively.
In a variation of this embodiment respective borrowers 102 and investors 104 may directly negotiate with each other via the server 206. Further, the institution for linking the investor and the borrower may not effect settlement but may simply inform prospective borrowers 102 or investors 104 that their requests have been accepted and settlement may be effected by another institution.
While the investors 104 may include investment institutions, the investors 104 typically are individuals who wish to invest their funds directly with a borrower 102 to benefit financially from the avoidance of an intermediary financial institution. The borrowers 102 typically also are individuals who wish to benefit from the avoidance of the intermediary financial institution.
The institution for linking the investor and the borrower will charge a fee for their services, such as a percentage of the interest rate that is paid by each borrower 102, but the fee typically will be significantly lower than the fee that is typically charged by a financial institution.
Consequently, as the fees are reduced, borrowers and/or investors may financially benefit from the method 100.
In a variation of this embodiment the method 100 may also include the step of approaching an investor 104 or a borrower 102 with an offer from a borrower 102 or investor 104, respectively. For example, this may comprise preparing marketing material which the borrowers 102 and investors 104 may review before a bid is posted by the investors 102 or borrowers 104 for respective requests.
54226 11 The loans may be any type of loans and typically are one of the following: e Fully mortgage insured ist mortgage loans secured over residential property.
e Partially mortgage insured ist mortgage loans secured over residential property.
Uninsured Ist mortgage loans secured over residential property.
e Uninsured 2nd mortgage loans secured over residential property.
Uninsured 1st mortgage loans secured over commercial property.
Uninsured ist mortgage loans secured over industrial property.
Other classes of mortgages will also be created be sub-sets of the above (eg: lo-doc loans, credit impaired loans, high LVR loans).
Loans secured over listed shares.
Loans secured over small businesses.
Loans secured over motor vehicles.
Mortgage Insurance Investment (where a person will receive a fee for taking on all or part of the credit risk of a transaction written through the platform).
Liquidity Investment (where a person could receive a fee for providing other investors with the comfort of knowing they can redeem their investment by on selling it to them at any time).
The institution for linking the investor and the borrower may also offer additional services. For example, such services may include valuation of assets such as homes for home loans, mortgage insurance, preparing documents and issuing any type of statements. Further, the institution may be responsible for receiving payment 54226 12 from the borrower, such as monthly repayments and may direct payments to the respective investors. Typically the institution will charge a fee for this service.
In a specific example the institution initially issues a valuation report by an approved valuer (step 106). Credit references and servicing are checked (steps 108 and 110) before mortgage insurance cover is issued (step 111). In this example, the institution approaches an investor 104 with a prospectus (step 102). The investor 104 then reviews the prospectus and signs documents. Funds are then transferred from the investor 104 to a trust account (step 114). The investor 104 may then select a request from a borrower and may post a bid (step 116).
Bids are then made accessible by borrowers 102 and investors 104 (step 118) and if a bid for a request by a borrower 102 or investor 104 is accepted, settlement may be effected by the institution. This includes in this example issuance of loan documents, such as mortgage documents in trustees' names (step 120). The documents are then certified by an approved solicitor (step 122) and the loan settles (step 124). The borrower 102 may then direct payments to the institution (step 126) which manages the loan (step 128). Further, the institution may forward payments to the investor (step 120) and may receive a management fee (step 132).
Figure 3 to 3 show a flow-chart illustrating a method for linking a borrower and an investor according to another embodiment of the present invention. The flow chart shown in Figure 3 illustrates an example in which a borrower A is associated with three investors X, Y and Z. In this example the software routine of the server 206, indicated as "exchange MIX", is used to associate the 54226 13 borrower A with the investors X, Y and Z in a manner such that each investor receives a different interest rate and the borrower pays an average interest rate and a fee. In this example the borrower borrows $300,000 at a rate of 6.0583% and investor X invests 50,000 at a rate of 5.9 investor Y invests $150,000 at a rate of 6.05% and investor Z invests 100,000 at a rate of 6.15%.
In the embodiment illustrated by flow-chart 3(b) one investor A is associated with three borrower X, Y and Z.
In this example the software routine of the server 206, again indicated as "exchange MIX", is used to associate the investor A with the borrowers X, Y and Z in a manner such that each borrower pays a different interest rate and the investor receives an average interest rate (the borrowers also pay a fee). In this example the investor invests $1,200,000 at a rate of 6.1% and borrower X borrows 375,000 at a rate of 6.11 borrower Y borrows $325,000 at a rate of 6.25% and borrower Z borrows 500,000 at a rate of 6.00%.
In the embodiment illustrated by flow-chart 3(c) three borrowers are associated with three investors. In this example the software routine of the server 206 is used to associate borrowers x, Y and Z with investors X, Y and Z. In this example all borrower pay the same interest rate of 6.15 and all investors receive the same interest rate of 6.15% (the borrower also have to pay a fee) Borrower X borrows 50,000, borrower Y borrows $150,000 and borrower Z borrows $100,000. Investor X invests $50,000, investor Y invests $150,000 and investor Z invests $100,000.
In will be appreciated that in variations of the embodiments illustrated in Figures 3(a) to 3(c) any number of borrowers may be associated with any number of 54226
I
14 investors which may or may not pay and receive, respectively, the same interest rate.
In one example a number of loans associated with borrowers may be pooled together and the loan pool may be offered to one or more investors. A number of such pools may be formed which may be distinguished by loan characteristics such as loan/value ratio, loan insurance, loan term or loan size.
Although the invention has been described with reference to particular examples, it will be appreciated by those skilled in the art that the invention may be embodied in many other forms. For example, the investors may not be individuals or institutions but may each be a group of individuals. Further, the method may not be computer software supported.
54226
Claims (4)
1. A method for linking an investor and a borrower, the method comprising the steps of: receiving a plurality of requests for loans and for investing funds, the requests being associated with borrowers and investors respectively, providing access for at least one borrower or investor to information related to the requests for investing the funds and/or for the loans so that the or each borrower or investor can consider the information, providing a means for associating more than one borrower with at least one investor or more than one investor with at least one borrower in a manner such that invested funds can be split between the associated borrowers or a loan amount can be split between the associated investors respectively, and providing the or each borrower or investor with a means for indicating that conditions associated with a request for investing the funds or for the loan, respectively, are acceptable, wherein the conditions are at least to some extent determined by the or each investor and the or each respective borrower.
2. The method of claim 1 or 2 wherein at least one borrower is associated with more than one investor and the conditions for one associated investor include an interest rate that is different to that of another one of the associated investors.
3. The method of claim 1 or 2 wherein at least one 54226 16 investor is associated with more than one borrower and the conditions for one associated borrower include an interest rate that is different to that of another one of the associated borrowers.
4. A computer software supported system for linking an investor and a borrower, the system comprising: a means for receiving a plurality of requests for loans and for investing funds, the requests being associated with borrowers and investors respectively, a means for providing access for at least one borrower or investor to information related to the requests for investing the funds and/or for the loans so that the or each borrower or investor can consider the information, a means for associating more than one borrower with at least one investor or more than one investor with at least one borrower in a manner such that invested funds can be split between the associated borrowers or a loan amount can be split between the associated investors respectively, and a means for indicating that conditions associated with a request for investing the funds or for the loan are acceptable, wherein the conditions include an interest rate and the interest rate is at least to some extent determined by the or each investor and the or each respective borrower. A method for linking an investor and a borrower, the method comprising the steps of: receiving a plurality of requests for loans and for investing funds, the requests being associated with borrowers and investors respectively, 54226 I 17 providing access for at least one borrower or investor to information related to the requests for investing the funds and/or for the loans so that the or each borrower or investor can consider the information, and providing the or each borrower or investor with a means for indicating that conditions associated with a request for investing the funds or for the loan, respectively, are acceptable, wherein the conditions are at least to some extent determined by the respective investor and borrower such that a margin that is conventionally charged by a financial institution for borrowing or investing funds with the financial institution is at least in part avoided. DATED this 10 day of SEPTEMBER 2004 GLEN SPRATT By his Patent Attorneys GRIFFITH HACK 54226
Priority Applications (1)
| Application Number | Priority Date | Filing Date | Title |
|---|---|---|---|
| AU2004100765A AU2004100765A4 (en) | 2004-08-12 | 2004-09-10 | A method for linking an investor and a borrower |
Applications Claiming Priority (3)
| Application Number | Priority Date | Filing Date | Title |
|---|---|---|---|
| AU2004904563A AU2004904563A0 (en) | 2004-08-12 | A method for linking an investor and a borrower | |
| AU2004904563 | 2004-08-12 | ||
| AU2004100765A AU2004100765A4 (en) | 2004-08-12 | 2004-09-10 | A method for linking an investor and a borrower |
Publications (1)
| Publication Number | Publication Date |
|---|---|
| AU2004100765A4 true AU2004100765A4 (en) | 2004-11-04 |
Family
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Family Applications (1)
| Application Number | Title | Priority Date | Filing Date |
|---|---|---|---|
| AU2004100765A Ceased AU2004100765A4 (en) | 2004-08-12 | 2004-09-10 | A method for linking an investor and a borrower |
Country Status (1)
| Country | Link |
|---|---|
| AU (1) | AU2004100765A4 (en) |
-
2004
- 2004-09-10 AU AU2004100765A patent/AU2004100765A4/en not_active Ceased
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Legal Events
| Date | Code | Title | Description |
|---|---|---|---|
| FGI | Letters patent sealed or granted (innovation patent) | ||
| MK21 | Patent ceased section 101c(b)/section 143a(c)/reg. 9a.4 - examination under section 101b had not been carried out within the period prescribed |