Cobalt Intelligence Lending Workflow: Portfolio Monitoring – The Early Warning System

The Problem: The "Silent Default"

Most lenders wait for a bounced ACH payment to trigger a collections event. By then, it’s often too late. The business didn't just have a bad week; they dissolved the entity, disconnected the phone, and liquidated assets 45 days ago.

You are carrying "zombie risk"—active loans on your books where the underlying legal entity has already ceased to exist. If your loan agreement includes a "Maintenance of Existence" or "Material Adverse Change" clause, a dissolution event is often an immediate technical default, allowing you to accelerate the loan before the bank account hits zero.

But you can't enforce what you can't see.

The Solution: Proactive Portfolio Sweeps

You don't need to check every borrower every day. But you do need a systematic way to re-verify the "Good Standing" status of your active portfolio on a cadence (e.g., monthly or quarterly).

Since Cobalt Intelligence does not strictly offer a "push notification" subscription service out of the box, lenders build this "monitoring" capability using Batch Sweeps and Asynchronous Webhooks.

Two Approaches to Monitoring

1. The Nightly/Monthly Batch Sweep (The Standard)

This is the most common pattern for MCA and term lenders.

• The Workflow: On the 1st of the month, your system exports a CSV or JSON list of all active borrower_ids, business_names, and states.
• The Action: You loop through this list and hit the Cobalt SOS API.
• The Check: Compare the new normalizedStatus against the status on file.
  
  • Old: Active
  • New: Dissolved / Forfeited / Inactive
• The Outcome: Flag the account for "Urgent Review" by the Collections team.

2. Asynchronous Webhooks (The High-Volume Method)

If you have 10,000+ active loans, a synchronous loop will time out or clog your threads. Use the callbackUrl pattern to handle the load efficiently.

• The Workflow: Fire 10,000 requests to the Cobalt API with a callbackUrl pointing to your listener (e.g., https://api.lender.com/webhooks/sos-update).
• The Efficiency: The API accepts the requests instantly and processes them in the background. As each state returns data (seconds or minutes later), Cobalt POSTs the result to your server.
• The Benefit: You get the throughput of a bulk update without managing open connections or timeouts on slow states like Delaware.

Use Case: Triggering Early Collections

Why bother? Because Status Change = Risk Acceleration.

• Scenario: A borrower dissolves their LLC.
• Contract Clause: Most commercial loan agreements state that "Dissolution of the Borrower" is an Event of Default.
• Action: You don't have to wait for a missed payment. You can freeze remaining disbursements, demand immediate repayment, or file your Confession of Judgment (COJ) while there are still assets to attach.

Implementation Guide: Building the Monitor

Step 1: Define Your "Risk List"

Query your LOS for all loans with:

• Balance > $0
• Status = 'Current' or 'Late < 30'

Step 2: The Batch Script (Node.js Concept)

JavaScript

// Run this via Cron Job (e.g., Monthly)

async function runPortfolioSweep(activeLoans) {

  const webhookUrl = "https://your-server.com/hooks/cobalt-monitor";

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  activeLoans.forEach(async (loan) => {

    // Fire and forget - results come to the webhook

    await cobaltClient.post('/search', {

      searchQuery: loan.businessName,

      state: loan.state,

      liveData: true, // Force fresh data

      callbackUrl: webhookUrl,

      customId: loan.loanId // Pass your ID to link the result back

    });

  });

}

Step 3: The Webhook Receiver

JavaScript

// Handle the incoming results

app.post('/hooks/cobalt-monitor', (req, res) => {

  const { normalizedStatus, customId } = req.body;

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  // Retrieve previous status from your DB

  const loan = db.getLoan(customId);

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  if (loan.status === 'Active' && normalizedStatus !== 'Active') {

    // ALERT: Status changed!

    createTask({

      team: 'Collections',

      priority: 'High',

      message: `Borrower ${customId} status changed to ${normalizedStatus}. Verify existence.`

    });

  }

  res.sendStatus(200);

});

"How Much Risk Are You Missing?" Calculator

Estimate the hidden cost of "zombie" loans in your portfolio.

1. Portfolio Size: $___________ (e.g., $50,000,000)
2. Annual Dissolution Rate: ~2% (Conservative estimate for SMBs)
3. Risk Exposure: $1,000,000 in principal at risk of silent dissolution.
4. Recovery Drop: Recovery rates drop by ~40% once a business is fully wound down vs. catching them during the dissolution filing window.

Potential Loss: **$400,000/year** due to delayed detection.

Cost of Monitoring: ~$0.20 - $0.50 per loan/month (depending on volume).

The math is simple. One caught default pays for the entire year of monitoring.

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