--- title: Loan funding slug: concepts/lending/loan-funding description: Arix funding engine lets you control loan rails, order, and fallbacks. After approval, loans move to InFunding, then Funded, NotFullyFunded, or Returned. docTags: createdAt: 2025-04-02T06:22:50.794Z --- ## Arix funding engine The Arix funding engine allows you the flexibility to control how the loan is funded. You can enter instructions and control the rails, and the order in which to attempt to fund over those rails. You can also elect to fund different parts of the loan over different rails, and supply fallback options if rails fail. After the loan is approved for funding, Arix initiates funding. The loan passes to the InFunding status and funds are sent using rails. There are several [rail types](docId\:t9u_6qCUmY9WeZeISalp1) you can use. Depending on the rail type, funding results might be immediate or take up to a few days. Based on how the funding progresses, the loan can be in one of these statuses: - `InFunding` leads to `Funded` or `NotFullyFunded` - `Returned` ## Status: Infunding/ Funded 1\. After the loan is approved, funding starts automatically. Arix tries the **Priority 1** rail first to start funding. **Status: InFunding** 2\. When all the rails are successfully funded, the status of the loan changes to funded **Status: Funded** 3\. After the loan has funded, the loan seasoning period begins, which typically occurs on business day 2 or 3 from the funding date. :::hint{type="info"} **If no amount is specified in the request, the funding engine attempts to fund the full loan amount.** ::: ## Status: NotFullyFunded If the loan doesn't fully fund from the first rail (priority 1), the engine looks for the priority 2 rail. A priority 2 rail can be: - A rail that was originally designated as a priority 2 (to follow a priority 1 rail) - The next priority 1 rail The funding engine continues to process rails until there are no rails left to process. If after all the rails have been processed there is an outstanding loan balance, the loan status is then updated to `NotFullyFunded`. When `NotFullyFunded`, you can submit new funding information. ### Skipped rails If the loan is fully funded prior to the last rail, any rails that weren't attempted are labeled **Skipped**. ## Status: Returned funds In most cases the funding goes smoothly and the funds are fully received by the borrower. However, funding requests can fail immediately or succeed and then be returned later. If a rail fails, is rejected, or returned, Arix reports a detailed error message as part of the railUpdate webhook and in the `LoanDetail` API. ## Loan funding follow-up Arix records all the funding attempts and continuously updates the status as each rail is processed, funded, or failed. If the loan wasn't fully funded and is in the status, `NotFullyFunded`, you can submit new funding information an unlimited number of times. This is also the process for required multiple disbursements over a period of time for a single loan. You should use the RailUpdated webhook to follow the funding process. :::hint{type="info"} Any loan update made via a **/PUT** call is ignored when the loan is InFunding. ::: Arix generates [webhooks](docId\:jXGfRbtNHOshrZJYHYKTo) which keep you up to date on the loan status. Based on how the funding progresses, the loan can be in one of these statuses: - `InFunding` leading to `Funded` - `NotFullyFunded` - `Returned` ## Pull funding from merchant The [PullFunding API](docId\:WBnY56dNE7PhLG2XJqPOq) enables Marketplace Lenders (MPLs) who leverage Arix to manage Merchant Returns. This functionality provides a method for MPLs to retrieve funds from merchant accounts back into the bank, using Nacha debits. This is especially useful when a merchant initiates a return or refund, as it reduces the need for manual reconciliation or additional requests, by reusing previously funded loan. :::hint{type="success"} It is best practice to wait three days before sending out funds after a successful pull. According to Nacha standards, a pull can be returned to the merchant. Most returns tend to occur within the first three days. To reduce the likelihood of overfunding, it is advisable to wait before sending out the next `FundingInfo` request. ::: # Next steps - [Loan returns](docId\:yvKvFJcitSb3lCSg1d6Op) - [Loan seasoning, sale or retention](docId\:DoBshm4E1JoFa8FUVqAPh) - [Servicing data submission and reconciliation](docId\:sJ6yahWlYzkEDLo6oiJf3)