Credit Facility

A credit facility is a type of loan made in a business or corporate finance context. It allows the borrowing business to take out money over an extended period of time rather than reapplying for a loan each time they need money. In effect, a credit facility lets a company take out an umbrella loan for generating capital over an extended period of time. Various types of credit facilities include revolving loan facilities, committed facilities, letters of credit, and most retail credit accounts

Q2 Origination supports origination for following credit facilities:

Loan
Lease
Line of Credit
Package

Examples of Credit Facilities

A retail credit facility is a method of financing—essentially, a type of loan or line of credit—used by retailers and real estate companies. Credit cards are a form of retail credit facility.
A revolving loan facility is a type of loan issued by a financial institution that provides the borrower with the flexibility to draw down or withdraw, repay, and withdraw again. it's similar to line of credit.
A committed facility (project finance) is a source for short- or long-term financing agreements in which the creditor is committed to providing a loan to a company—provided the company meets specific requirements set forth by the lending institution. The funds are provided up to a maximum limit for a specified period of time and at an agreed interest rate. Term loans are a typical type of committed facility..

Note:

Parties associated with the child applications of a package application must be a subset or the same set of the parties associated with the package application.
The system must update the Utilized Amount of the parent application every time a child application is created/associated. This must be done when the loan amount on the child application is modified as well.
A new field called "Total Amount Repaid" must be added on the child application.
- Field Name: Total Amount Repaid
- Field Description: This field stores the total amount repaid against this particular drawdown. This will be updated via an external feed.
The total amount repaid on all the child applications rollups to the parent application.
Parent Application = Credit Facility = Deal Application (Existing CLO Terminology)
Child Application = Drawdown = Credit Facility Application (Existing CLO Terminology)

Prerequisites

Before you proceed to create a child application/credit facility, ensure that the following prerequisites are met:

The borrowers/lessees on the child application must be a subset or same as the parent application. This check must be done only for party types "Borrower" and "Lessee"
The Add Facility button is enabled only if the Deal Status of the parent application is Live.
The Add Facility button is enabled only if the Maturity Date of the parent application is greater than or equal to current system date.
Drawdown terms are defined.

Steps

To create a child application/credit facility:

Select the created package application for which you want to create a child application.
Select Add Facility.
Note:
The Add Facility button is enabled only if Deal Status is Live and Maturity Date is >=the current system date.
From the list of application, select one existing application that you want to add to the deal application or create a new child application.
Note:
Both parent and child applications should belong to the same account.
Specify the required field values depending on the selected CL Product field, and then select Save.
Under the Deal application, the Credit Facility/Child Application is created, and the Deal Statistics section is displayed with the updated field values.

Field	Description
Key Dates
Expected Start Date	The expected start date of the loan application. This is the date on which the loan contract is expected to start.
Expected Close Date	The expected close date of the loan application. This is the date on which the loan contract is expected to close.
Maturity Date	The date of the maturity of a loan.
Deal Codes
Call Code	The Call Code for CRA reporting.
Class Code	The Class Code to identify the loan or lending product type.
Portfolio Code	The Portfolio Code if the loan is included in a portfolio of related loans.
Deal Statistics
Deal Type	This field determines if the credit facility is revolving or non-revolving in nature. The default value is Non-Revolving. The supported options are: Revolving - A revolving loan facility is a form of credit facility issued by a financial institution to a borrower/lessee for a specific time period (term). This will provide the borrower/lessee with the ability to draw down or withdraw, repay, and withdraw again in that time period. Non-Revolving - A non-revolving loan facility is a form of credit facility issued by a financial institution to a borrower/lessee for a specific time period (term). This will provide the borrower/lessee with the ability to draw down or withdraw the sanctioned amount in multiple draw downs within the specified time period. On repayment, the repaid amount wont become available for drawdown again. Note: This is only for the parent application.
Deal Amount	This is the requested loan amount that is approved for the borrower.
Deal Status	This field determines the status of credit facility. The supported options are: Pending Approval: This value means that the credit facility has not been approved and hence not available for drawdowns. Live: This value determines that the credit facility has been approved and the credit facility is now available for drawdowns. On-Hold: This status will be set by a user when the credit facility was already "Live" , but for some reasons , they want to put the drawdowns on hold. Closed: This status will be set by a user when the credit facility is permanently closed and drawdowns under this facility will no-longer be allowed. Note: On Application creation, the default value will be set as "Pending Approval".
Total Utilized Amount	This is the sum total of the loan amounts of all the associated child applications. This is tracked at the parent application level.
Total Available	This is the amount available to the borrower for drawdown. This is tracked at the parent application level. If Total Available Amount is less than zero while adding the child application, the system displays an error message "Insufficient available amount on parent facility. Do you wat to proceed?" is displayed. Select Yes to add the child application. When deal type is revolving: Total Available = Deal Amount - Total Utilized Amount + Total Repaid When deal type is non-revolving: Total Available = Deal Amount - Total Utilized Amount Note: The Total Available Amount may display negative values if the "Total Utilized Amount" exceeds the Deal Amount.
Total Repaid	This is the amount paid towards the associated child applications.
Total Fee Amount	This is the fees associated with the child applications.
Deal Summary
Loan to Value Ratio	This is calculated as Credit Facility Amount/Total Pledged Collateral Amount. Total Pledged Collateral Amount is sum total of all the collaterals associated with the child applications.