Settlement Amount

Overview

The settlement amount is the total amount a client must send to Lead on the loan sale date. Lead expects this amount to be transferred to the Operating Account before the client sends a Sales Response.

settlement_amount = outstanding_principal + settled_transactions_amount + imputed_interest_accrued

There are other invoicing items besides imputed interest to which you are subject, per your Program Management Agreement.

Reach out to your technical account manager for more details.

Note: receivables sold and purchased do not include any fees or interest charged to your end customer. Since those funds are not originated by Lead, they will not need to be sold.

Components of Settlement Amount

Outstanding Principal

The total amount of disbursed transactions (type = disbursement) for each balance_id based on the receivables origination date. Receivables are created at Lead at the balance level when Lead receives a Transactions file with type = disbursement. Lead sells these back to the client after the hold period.

Example

If the hold period is 3 business days, and the sale date is Thursday, then the outstanding principal will reflect receivables from disbursements with a settlement date of the prior Monday.

Settled Transactions Amount

Lead uses gross settlement, meaning all payments that reduce outstanding principal during the hold period will still be collected from the client.

Card refunds are the only exception and use net settlement:

During hold: Lead receives refunds directly from the network and nets them out of the settlement.
After hold: Refund amounts are returned to your operating account.

Imputed Interest Accrued

Daily interest accrued on outstanding principal of receivables created during the hold period.

If interest-based: Lead charges the same effective APR as the client charges the end customer.
If fee-based: For fee-based products (with no end customer interest), the Program Management Agreement outlines the applicable imputed interest rate.

When applicable, the rate is set based on the rate published on the last business day of the month prior to the loan’s origination date. This rate remains fixed for the entire hold period, even if the hold period spans multiple months.

Example

A loan originates on March 31 with a three day hold period. The applicable rate is taken from 2/28 (the last business day of the prior month), which was 4.39%. That 4.39% rate applies for all three days of the hold period.

Payments are applied on a first-in, first-out (FIFO) basis to non-Lead receivables before being applied to Lead receivables.

Payment reversals are applied in a last-in, first-out (LIFO) order to Lead-held receivables up to the originated amount.

Refunds and disputes affect specific transactions if the original_transaction_id is included.

Origination & Sale Date

Assuming a three business day hold period (refer to your contract for your program’s hold period), here is how origination and sale dates align:

Origination Date settlement_date of type = disbursement	Sale Date
Monday	Thursday
Tuesday	Friday
Wednesday	Monday
Thursday	Tuesday
Friday	Wednesday
Saturday	Thursday
Sunday	Thursday

Weekend settlements do not occur because payment rails only operate on business days.
Note: Federal holidays are not business days. For example, on MLK day of January 20th (Monday), any receivables created on Friday (January 17th) will sell on Thursday (January 23rd).

Examples

Field	Receivables Created	Outstanding Principal	Settled Transactions	Imputed Interest Accrued	Settlement Amount
Weekday Loan Hold	$20.00	$20.00	$0.00	$0.02	$20.02
Weekend Loan Hold	$20.00	$20.00	$0.00	$0.04	$20.04
Payment During Hold Period (no prior outstanding principal)	$20.00	$5.00	$15.00	$0.02	$20.02
Payment During Hold Period (prior outstanding principal)	$20.00	$15.00	$5.00	$0.02	$20.02
Refund During Hold Period	$20.00	$0.00	$0.00	$0.01	$0.01
Full Cancellation During Hold Period	$100.00	$0.00	$100.00	$0.00	$100.00
Partial Cancellation During Hold Period	$100.00	$70.00	$30.00	$0.07	$100.07

Refunds are credited to the Network Settlement Account, so you are not responsible for repaying them if they occur during the hold period. If refunds occur outside of the hold period, Lead provides funds back to your Operating Account.

Details

Weekday Loan Hold

Example assumes origination date of Monday (March 31st, 2025), three business-day hold period, imputed interest rate of +10%.

(T = Loan Origination Date) A $20 card transaction occurs on John’s Balance.
- type = disbursement
- transfer_type = card
- settlement_date = 2025-03-31
(Hold Period) Lead holds receivables for 3 business days. Example assumes 3-business-day hold.
(T+Business Day 3 = Thursday) Lead sends Sales Request with following settlement summary:

Field	Value
outstanding_principal	$20.00
settled_transactions_amount	$0.00
imputed_interest_accrued	$0.02
settlement_amount	$20.02

Imputed interest calculation is as follows:

Daily Imputed Interest	Calculation
Imputed interest on 3/31 (Monday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 4/1 (Tuesday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 4/2 (Wednesday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Total	$0.023655 and rounded to $0.02

Weekend Loan Hold

Example assumes origination date of Thursday (March 27th, 2025), three business-day hold period, imputed interest rate of +10%.

(T = Loan Origination Date) A $20 card transaction occurs on John’s Balance.
- type = disbursement
- transfer_type = card
- settlement_date = 2025-03-27
(Hold Period) Lead holds receivables for 3 business days. Example assumes 3-business-day hold.
(T+Business Day 3 = Tuesday) Lead sends Sales Request with following settlement summary:

Field	Value
outstanding_principal	$20.00
settled_transactions_amount	$0.00
imputed_interest_accrued	$0.04
settlement_amount	$20.04

Imputed interest calculation is as follows:

Daily Imputed Interest	Calculation
Imputed interest on 3/27 (Thursday)	$20 of receivables created on 3/27 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 3/28 (Friday)	$20 of receivables created on 3/27 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 3/29 (Saturday)	$20 of receivables created on 3/27 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 3/30 (Sunday)	$20 of receivables created on 3/27 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 3/31 (Monday)	$20 of receivables created on 3/27 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Total	$0.039425 and rounded to $0.04

Payment During Hold Period (no prior outstanding principal)

Example assumes origination date of Monday (March 31st, 2025), three business-day hold period, imputed interest rate of +10%. There was a payment of $15 towards the credit balance on Wednesday (April 2nd, 2025).

(Prior to T) There were no outstanding principal on John’s account (outstanding_principal = $0)
(T = Loan Origination Date) A $20 card transaction occurs on John’s Balance.
- type = disbursement
- transfer_type = card
- settlement_date = 2025-03-31
(Hold Period) Lead holds receivables for 3 business days. Example assumes 3-business-day hold.
- (T+Business Day 2 = Wednesday) Client sends $15 card payment on John’s Balance
  - type = payment
  - transfer_type = card
  - settlement_date = 2025-04-02

(T+Business Day 3 = Thursday) Lead sends Sales Request with following settlement summary.

Field	Value
outstanding_principal	$5.00 ($20 - $15 card payment) The entire $15 is applied to the newly disbursed amount using FIFO logic (first-in, first-out)
settled_transactions_amount	$15.00
imputed_interest_accrued	$0.02
settlement_amount	$20.02

Imputed interest calculation is as follows.

Daily Imputed Interest	Calculation
Imputed interest on 3/31 (Monday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 4/1 (Tuesday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 4/2 (Wednesday)	$5 remaining of $20 receivables created x (4.39% as of 2/28 + 10%) / 365 days = $0.001971
Total	$0.017741 and rounded to $0.02

Payment During Hold Period (prior outstanding principal)

(Prior to T) There was outstanding principal on John’s account of $10 (outstanding_principal = $10).
(T = Loan Origination Date) A $20 card transaction occurs on John’s Balance.
- type = disbursement
- transfer_type = card
- settlement_date = 2025-03-31
(Hold Period) Lead holds receivables for 3 business days. Example assumes 3-business-day hold.
- (T+Business Day 2 = Wednesday) Client sends $15 card payment on John’s Balance
  - type = payment
  - transfer_type = card
  - settlement_date = 2025-04-02
(T+Business Day 3 = Thursday) Lead sends Sales Request with following settlement summary:

Field	Value
outstanding_principal	$15.00 The $15 payment is applied as follows using the FIFO method: $10 reduces the pre-existing balance, $5 reduces the newly disbursed $20, and the remaining $15 of the new loan is still outstanding
settled_transactions_amount	$5.00
imputed_interest_accrued	$0.02
settlement_amount	$20.02

Imputed interest calculation is as follows:

Daily Imputed Interest	Calculation
Imputed interest on 3/31 (Monday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 4/1 (Tuesday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 4/2 (Wednesday)	$15 remaining of $20 receivables created x (4.39% as of 2/28 + 10%) / 365 days = $0.005914
Total	$0.021684 and rounded to $0.02

Refund During Hold Period

This example shows how a refund during the hold period affects the settlement amount. If the refund is traceable to the original transaction using original_transaction_id, the associated receivable is reversed, and the client is not required to repay the amount.

(Prior to T) There was outstanding principal on John’s account (outstanding_principal = $10)
(T = Loan Origination Date) A $20 card transaction occurs on John’s Balance
- client_transaction_id = txn_1
- type = disbursement
- transfer_type = card
- settlement_date = 2025-03-31
(Hold Period) Lead holds receivables for 3 business days. Example assumes 3-business-day hold.
- (T+Business Day 1 = Tuesday) Client refunds the $20 transaction.
  - client_transaction_id = txn_2
  - type = refund
  - transfer_type = card
  - settlement_date = 2025-04-01
  - original_transaction_id = txn_1
- (T+Business Day 3 = Thursday) Lead sends Sales Request with following settlement summary.

Field	Value
outstanding_principal	$0.00 Given `original_transaction_id` of `txn_1` was provided, Lead is able to attribute this and bring down the receivables created to $0. If you do not provide an `original_transaction_id`, Lead cannot attribute the refund accordingly.
settled_transactions_amount	$0.00 Refund is the only transaction type that will be net settled with Lead.
imputed_interest_accrued	$0.01
settlement_amount	$0.01

Imputed interest calculation is as follows:

Daily Imputed Interest	Calculation
Imputed interest on 3/31 (Monday)	$20 of receivables created on 3/31 x (4.39% as of 2/28 + 10%) / 365 days = $0.007885
Imputed interest on 4/1 (Tuesday)	$0 remaining of $20 receivables created x (4.39% as of 2/28 + 10%) / 365 days = $0.000000
Imputed interest on 4/2 (Wednesday)	$0 remaining of $20 receivables created x (4.39% as of 2/28 + 10%) / 365 days = $0.000000
Total	$0.007885 and rounded to $0.01

Notes On Refunds

If a refund occurs during the hold period and is matched to a disbursement, the refunded amount is netted out of the settlement.
If a refund occurs after the hold period, Lead will return the refund to the client’s Operating Account instead.
Refunds must include original_transaction_id to ensure proper matching and netting. If there are no original_transaction_id referenced for refunds that occur during the hold period, then it will not be reflected in settlement_amount calculation.

Full Cancellation During Hold Period

Example assumes origination date of Monday (March 31st, 2025), three business-day hold period, interest rate of 10%. There was a full cancellation of the loan on Wednesday (April 2nd, 2025).

For this scenario, we use a different example with a term loan, as cancellations do not apply to cards.

(Prior to T) There is no outstanding principal on Sarah’s account (outstanding_principal = $0)
(T = Loan Origination Date) Sarah originates a $100 loan for 10% interest rate, increasing the balance by an equivalent amount.
- client_transaction_id = txn_1
- type = disbursement
- transfer_type = internal_transfer
- settlement_date = 2025-03-31
(Hold Period) Lead holds receivables for 3 business days. Example assumes 3-business-day hold.
- (T+Business Day 2 = Wednesday) Client sends a cancellation of the $100 transaction.
  - client_transaction_id = txn_2
  - type = cancellation
  - transfer_type = no_money_movement
  - settlement_date = 2025-04-02
  - original_transaction_id = txn_1
- (T+Business Day 3 = Thursday) Lead sends Sales Request with following settlement summary.

Field	Value
outstanding_principal	$0.00 Given `original_transaction_id` of `txn_1` was provided, Lead is able to attribute this and bring down the receivables created to $0. If no `original_transaction_id` is created, we will not be able to attribute the cancellation accordingly.
settled_transactions_amount	$100.00
imputed_interest_accrued	$0.00
settlement_amount	$100.00

Notes On Full Cancellations

The imputed interest calculation is unique in the case of a full cancellation. If a Disbursement Transaction is fully cancelled via a Cancellation Transaction with original_transaction_id provided during the hold period of the receivable created, Lead zeros out imputed interest accrued.
Cancellations must include original_transaction_id to ensure proper matching. If there are no original_transaction_id referenced for refunds that occur during the hold period, then it will not be reflected in settlement_amount calculation.

Partial Cancellation During Hold Period

Example assumes origination date of Monday (March 31st, 2025), three business-day hold period, interest rate of 10%. There was a partial cancellation of $30 on the loan on Wednesday (April 2nd, 2025).

For this scenario, we use a different example with a term loan, as cancellations do not apply to cards.

(Prior to T) There is no outstanding principal on Sarah’s account (outstanding_principal = $0)
(T = Loan Origination Date) Sarah originates a $100 loan for 10% interest rate, increasing the balance by an equivalent amount.
- client_transaction_id = txn_1
- type = disbursement
- transfer_type = internal_transfer
- settlement_date = 2025-03-31
(Hold Period) Lead holds receivables for 3 business days. Example assumes 3-business-day hold.
- (T+Business Day 2 = Wednesday) Client sends a partial cancellation of $30 of the $100 transaction.
  - client_transaction_id = txn_2
  - type = cancellation
  - transfer_type = no_money_movement
  - settlement_date = 2025-04-02
  - original_transaction_id = txn_1
- (T+Business Day 3 = Thursday) Lead sends Sales Request with following settlement summary.

Field	Value
outstanding_principal	$70.00 Given `original_transaction_id` of `txn_1` was provided, Lead is able to attribute this and decrease the receivables created to $70. If no `original_transaction_id` is created, we will not be able to attribute the cancellation accordingly.
settled_transactions_amount	$30.00
imputed_interest_accrued	$0.07
settlement_amount	$100.07

Imputed interest calculation is as follows:

Daily Imputed Interest	Calculation
Imputed interest on 3/31 (Monday)	$100 of receivables created on 3/31 x 10% / 365 days = $0.027397
Imputed interest on 4/1 (Tuesday)	$100 of receivables created on 3/31 x 10% / 365 days = $0.027397
Imputed interest on 4/2 (Wednesday)	$70 remaining of $100 receivable x 10% / 365 days = $0.019178
Total	$0.073972 and rounded to $0.07

Notes On Partial Cancellations

Cancellations must include original_transaction_id to ensure proper matching. If there are no original_transaction_id referenced for refunds that occur during the hold period, then it will not be reflected in settlement_amount calculation.

Foundations

File Guides

Overview

Components of Settlement Amount

Example

Example

Origination & Sale Date

Examples

Details

​Overview

​Components of Settlement Amount

​Example

​Example

​Origination & Sale Date

​Examples

​Details

Overview

Components of Settlement Amount

Example

Example

Origination & Sale Date

Examples

Details