Glossary

What is a loan management system (LMS)?

A loan management system (LMS) is software that manages a credit facility after funding — tracking repayment schedules, processing remittances, handling collections, and maintaining the borrower account. It picks up where the loan origination system (LOS) leaves off and is the operational home for the active portfolio.

Core LMS functions

An LMS tracks outstanding balances, applies payments, calculates fees and interest, manages delinquencies, and produces statements or remittance reports. For MCA funders, this includes daily ACH remittance processing against a purchased receivable balance.

LMS and compliance

Post-funding servicing generates its own compliance obligations — accurate account records, correct application of payments, and defensible collections practices. A well-structured LMS produces an auditable record of every transaction against each account.

FAQ

Loan Management System (LMS) — common questions

Do I need both an LOS and an LMS?

Most lenders eventually need both: an LOS to get deals done and an LMS to manage the portfolio. Early-stage funders sometimes use one tool for both, but the two functions have different data models and workflows.

Loan origination system (LOS) Case lifecycle

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