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Scenarios for Managing Loan Requests

These scenarios feature sample tasks performed by a financial institution's applications administrator and commercial bankers. Your company may follow different workflows according to its business requirements.

In these scenarios, the applications administrator is responsible for setting up approval stages and underwriting standards. He requires administrative responsibilities to:

  • Set up an assessment template and activities plan
  • Create a document template
  • Set up an approval level
  • Define portfolio types and underwriting standards

End users are loan officers and credit administrators. They enter information to:

  • Create a loan request
  • Create a facility for borrowers
  • Attach a company and financial needs analysis to the loan request
  • Choose a loan approval level
  • Assign the loan request to a credit committee

Administrator Sets Up Approval Stages and Underwriting Standards

An administrator receives a request to set up two new loan approval stages and add a new underwriting standard for a chemical portfolio. The request specifies that a loan smaller than one million dollars requires two approval stages, whereas a loan larger than one million dollars requires three approval stages. The administrator sets up the following two approval levels:

  • Level A for a loan less than one million
  • Level B for loans greater than one million

He also sets up the individuals who are responsible for approving each stage of the loan. Finally, the administrator sets up the new underwriting standard.

Loan Officer Creates New Loan Request

A loan officer receives a call from a chemical company that wants to borrow 1.25 million dollars for working capital. She creates a new loan request and then sets up a working capital facility. The officer determines the price and fees, collateral, covenants, and policy exceptions for this facility. She then attaches the company analysis and financial statement to the loan request.

When the loan officer chooses the chemical portfolio, the underwriting standard that is set by the administrator automatically appears. The loan officer chooses approval level B for the loan and selects the credit committee name for each stage.

Credit Committee Officer Reviews Loan Request

A credit committee officer reviewing her loan requests sees that there is a loan request in the queue waiting for her approval. She reviews the loan request details and the attachments that contain company and financial analysis. She decides to approve the credit. After adding her decision and comments to the loan request, the credit committee officer sends the request to the next credit committee officer for the officer's approval.

Credit Administrator Sets Up Capital Facility

A credit administrator looks at his queue and sees that one request has been approved. The administrator prints the credit summary with the decision and adds it to the company's credit file. The administrator then sets up the working capital facility that has been approved.

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