This chapter covers the following topics:
You can manage credit exposure in Lease and Finance Management using one of the following methods:
Lease Applications
Credit Lines
Lease applications are created and managed in Lease and Finance Management for the purpose of obtaining credit approval from Oracle Credit Management. A lease application contains both a lease sales quote and a credit application. Once a prospect has accepted a lease sales quote, you can convert the lease quote into a lease application, add customer credit data and pricing information and submit it for approval. You can also create a lease application without converting a lease sales quote.
A credit-approved lease application is used to create one lease contract. When you create a contract from a lease application, Lease and Finance Management uses associated Lease and Finance Management checklists and templates to default values on the contract and to validate the terms and credit recommendations to insure the contract is booked and the deal funded within the limits of credit approval.
Once the credit decision is approved, the decision and any other recommendations are updated on the Lease Application and the submitter views the results. Applications with an Approved decision may be used to create lease contracts. Any recommendations that are conditions associated with the credit decision are updated on the associated Lease and Finance Management checklist and invoked during booking or funding of the contract to insure the conditions have been met.
If you want to change a lease application after it has already been approved or rejected by Credit Management, you can select to resubmit it. A new lease application is created and linked to the existing one. If you do not agree with the credit decision or credit recommendations, you can appeal a lease application. A new lease application is created and linked to the existing one. You an update lease applications created for appeals and resubmits. You can also withdraw an application up to the point where the credit decision and recommendations are finally approved.
If you decide to extend credit through a credit line, the credit analyst may create and activate a Credit Line with an approved amount. The Credit Line may be associated to one or more contracts and checked for an available balance with each funding. Credit Lines may also have checklists. A checklist can be used for checking conditions prior to activating the Credit Line itself or associated with the Credit Line and used for each funding request tracked against it through a contract. You do not use a lease application to create or approve credit lines.
Before you use lease applications, you must complete the following set up tasks.
Create and Manage Credit Checklists
Create and Manage Lease Application Templates
Associate Lease Application Templates to Vendor Programs (optional)
All set ups required for quoting (except pricing tools)
All set ups required for Credit Management credit application processing
Credit checklists are created in Oracle Credit Management. You associate lease application templates to credit review checklists based on Credit Class and Review Type. When you submit a lease application for approval, a credit request is sent to Credit Management and Credit Management creates a credit application and credit folder. The Credit Management checklist, derived from the Credit Review Type and Customer Credit Classification associated to the Lease Application, determines the credit data required to evaluate an application, what score the credit values are assigned, and what recommendations are automatically assigned to the credit folder based on the score.
To create a credit checklist, see the Oracle Credit Management User's Guide.
Each lease application you create is based on a lease application template. The lease application template provides the following:
Based on the credit review type and customer credit class associated with the lease application template, a checklist is selected in Credit Management upon submission of the lease application. The checklist determines a list of data points required to complete the credit case folder.
A booking and funding checklist template is associated to the lease application template. This checklist is used during the booking and funding approval processes for any contract you create from a lease application based on the lease application template you selected.
A contract template is associated to the lease application template. This contract template defaults terms and conditions onto the contract you create from the lease application based on the lease application template you selected.
You can attach eligibility criteria to a lease application template to restrict the use of the template based on your deal attributes.
Once you activate a lease application template, you cannot modify it without creating a new version, except to change the Effective To date.
The Lease Application Template process includes the following optional and mandatory steps:
Create Lease Application Template
Attach Eligibility Criteria to Lease Application Template
Submit Lease Application Template for Validation, Approval, and Activation
Version Lease Application Template
Duplicate Lease Application Template
Associate Lease Application Template to a Vendor Program
You create lease application templates in the Create Lease Application Templates page after navigating to Setup > Origination or Operations > Credit > Lease Application Template. Click Create to begin the procedure
The following table describes fields for creating a lease application template.
| Field | Description |
|---|---|
| Operating Unit | Operating unit assigned to the record.
Note: The list of values includes operating units assigned to the MO: Security profile. Note: The application displays the selected operating unit as the default in the subsequent pages irrespective of the value that you set for the MO: Default Operating Unit profile option. The selected operating unit restricts the valid list of values in applicable fields. |
| Name | Mandatory field for a short description of the lease application template. |
| Credit Classification | Assigned to a customer party in Oracle Trading Community Architecture (TCA). You can set up a default value in Credit Management to be used for parties that have not yet been assigned a credit classification. Based on the credit classification of the customer you select when you create a new Lease Application, templates with matching values may be used |
| Credit Purpose Review | Select from a list of values based on review types you set up in Credit Management. You can also set up a default review type. Based on the credit review type you select when you create new Lease Applications, templates with matching values may be used. |
| Valid From | An effective date is mandatory. Lease and Finance Management defaults to the current date, but you can change this. Based on the expected rental period start date you enter for new Lease Applications, templates with dates after this date may use the template. |
| Valid To | Must be after Effective From date. Based on the expected rental period start date you enter for new Lease Applications, templates with dates before this date may use the template. |
| Status | New, Active, or Under Revision for the overall template as assigned by Lease and Finance Management. Version statuses include New, Submitted for Approval, Active, Rejected |
| Industry Class & Code | Optional fields displaying a list of values from Oracle TCA. Based on the industry associated to a customer you select when you create new Lease Applications, templates with matching values may be used. |
| Contract Template | Provides terms and conditions that copy onto a new deal when the approved lease application created from the template is converted into a lease contract. |
| Lease Application Checklist | The checklist will provide all the validations that need to be performed when a contract associated with a lease application created from the lease template is booked or funded. There must be an overlap of at least one day between the effective days of the checklist and the effective days of the lease application template it is associated to. |
Attaching eligibility criteria to a lease application template restricts the use of the template according to the values and conditions you define. Values you enter when creating a new lease application are compared to the eligibility criteria values you enter for a template to determine if the template can be used for a particular lease application deal.
Select the Eligibility Criteria tab in the Lease Application Template page and enter your eligibility restrictions. You can enter Eligibility Criteria Items, Criteria Effective Dates, and the Criteria Value or Value Range. Before you can use a Criteria Category and assign restricting values, the category must be set up for use with Lease Application Templates in order to select it.
When you have entered all lease application template details, you can submit the lease application template for approval before it can be used to create new Lease Applications. Lease and Finance Management will run validations to ensure that the checklist template has as least one effective date overlap with the lease application template effective dates. A failed lease application template will return a status of Invalid.
When a lease application template passes validation, a request is sent to the approver for approval of the template based on the approval hierarchy set up in Oracle Approval Manager (AME). Once everyone in the AME approval hierarchy approves the lease application template, it is activated by Lease and Finance Management and given a status of Active. A lease application template cannot become eligible for selection on a lease application or a vendor program agreement until it has an Active status. Modification of an associated contract template or checklist does not effect the status of a lease application template.
Once a lease application template is Active, you can't modify it, except to change the Effective Date, without creating a new version of the template. This insures that any deals you approved previously can still use the template version that was active on the date you approved any associated lease applications. Lease and Finance Management validates that lease applications used with previous template versions are not in Active, Withdrawn, or Cancelled statuses. All fields from the previous version are copied and you can change the Valid To date, Contract Template, Industry, Lease Application Checklist, and Description fields in the new version. All other fields cannot be updated.
You can create a new lease application template by copying an existing lease application template. All fields except the template Number will be copied to the new template. You can update all details on the duplicated template. Duplicated templates must be validated and approved before they become active and available for use with new Lease Applications.
You can associate a lease application template to a vendor program to restrict the use of the template to deals associated with the program. The following restrictions exist on associating a template to a vendor program:
Only one lease application template with a unique combination of Lease Application Type, Credit Review Type, Credit Classification, and Industry is allowed on a vendor program for an association date. This insures that a template can automatically be assigned based on the attributes you enter when creating new applications for a vendor program.
Only Active lease application templates can be associated to a vendor program.
Only lease application templates that belong to an Org Unit of Vendor Program Agreement can be associated to a vendor program.
You can create a lease application without using a lease sales quote as the source. The following table outlines the lease application process.
| Step | Description |
|---|---|
| Create a Prospect | Create prospects in Oracle Trading Community Architecture (TCA). |
| Create Lease Application Template | See Create Lease Application Template. |
| Create and Associate Credit Checklist | Credit Checklists are created in Credit Management. |
| Associate Prospect to Lease Application | A prospect must be associated to the Lease Application. |
| Associate Active Vendor Programs | See Associate a Lease Application Template to a Vendor Program. |
| Select Valid Active Lease Application Template | You must select a valid lease application template with a status of Active. |
| Enter Lease Application Deal Details | Details can include configuration data and financing adjustments information such as trade-ins, down payments, subsidies, and payment details |
| Enter Payments and Calculate Yields | Enter credit application details as required by the selected lease application template. After entering all details, calculate the yield. |
| Approve Lease Application Pricing | See Pricing. |
| Accept Pricing | See Pricing. |
| Validate Lease Application | See Submit Lease Application Template for Validation, Approval, and Activation. |
| Submit for Pricing Approval | If you modify a lease application's pricing details, you must obtain pricing approval and customer acceptance again to complete the pricing process. |
| Accept Lease Application | Update prospect acceptance of the lease application. |
| Submit Completed Lease Application for Credit Evaluation | Credit can approve the lease application for the original offer and provide alternate approved offers. You can select an offer and copy the approved terms to a contract. |
| Convert Lease Application Into a Contract | Terms and conditions defined on the contract template associated to the lease application template flow to the new contract. |
| Book the Contract | See Book the Contract. |
| Fund the Contract | When you approve funding, Lease and Finance Management validates the funding request and generates a report to identify passed and failed conditions on the lease application so you can decide to approve or reject the funding request. |
Prospects for a lease sales quote are created in Oracle Trading Community Architecture. To create a new prospect, see the Oracle Trading Community Architecture User Guide.
You can create a lease application to request credit approval for a specific deal. Deal details for a lease application can come from an existing accepted lease sales quote, or you can enter a new deal for a lease application. If a lease application originates from an accepted lease sales quote, then the lease application deal details, such as configuration and pricing will come from the lease sales quote. You can also create all lease application details without referring to a lease sales quote.
A lease application template must be associated to every lease application created. When you create a lease application, Lease and Finance Management matches the values you enter for creating the lease application to the active templates and displays a list of eligible lease application templates for your selection. Once you have entered lease application details, you must validate it, price it, and accept it before you can submit it for a credit decision. The pricing must be approved before you can mark it for acceptance. You can also save lease applications that are in progress and update them before submission for approval.
When you submit a lease application to credit, Lease and Finance Management submits a credit request and a credit application and case folder are created in Credit Management. The credit review type and credit classification on the lease application determine a valid credit review checklist in Credit Management. Credit Management used the credit review checklist to determine all of the required data necessary to complete the credit case folder. The data points can come from information you enter on a lease application, from the customer party record or from any other source you set up. Only completed credit case folders with all required data points can be processed for scoring and recommendations in Credit Management. For more information on setting up credit review checklists and associating data points, see the Oracle Credit Management User’s Guide.
The decisions you make about an application are stored on a case folder as recommendations. When a case folder is completed and approved, the recommendations become final and Credit Management implements them. If you use a seeded lease application recommendation, the lease application is automatically updated when you approve the lease application’s case folder. The decisions you make on the credit case folder determine if the lease application can be used to create a new contract.
If you approve a lease application case folder with a recommendation of Approve”, the lease application status is updated to Approved, and it can be used to create a new lease contract.
If you approve a lease application case folder with a recommendation of Reject, the lease application status is updated to Rejected, and it cannot be used to create a new lease contract. Lease Applications with a status of Rejected can be appealed or resubmitted. There are other recommendations you can add to a lease application case folder that will update the lease application including modifying the lease application booking and funding checklist and adding credit recommended deal offers.
You should insure that the items on the booking and funding checklist associated to the lease application template for the lease application of the case folder are the terms you want to enforce during booking and funding. Once the lease application case folder is approved, whatever checklist is associated to the lease application template at the time of approval will be used during booking and funding if you use the lease application to create a new contract.
To create a lease application, complete the following tasks.
Enter Lease Application Details
Create or Update Lease Application Quote
Add Credit Information
Validate Lease Application
You can source a lease application from a lease sales quote, or create a lease application from scratch. If you source a lease sales quote, the lease sales quote details will default to the new lease application. You can update the defaulted sales quote information and enter additional details, but after updating the details, you must validate, price, approve, and accept the new version.
You select a lease application template from a list of values which is based on the credit classification and industry of the prospect, the eligibility criteria associated to the template, and the vendor program on the lease application. The credit review type and credit classification you enter when creating new lease applications uniquely identify a credit review checklist set up in Credit Management. The credit review checklist determines which credit data points on the lease application you must enter for the customer or the deal. The lease application template provides terms and conditions, along with a checklist, for funding and booking validations on the contract to be created from the approved lease application.
Enter lease application details in the Create Lease Application page by navigating to Customers > Credit > Lease Applications. The following table describes lease application fields.
| Field | Description |
|---|---|
| Operating Unit | Operating unit of the record.
Note: The list of values includes operating units assigned to the MO: Security profile. Note: The application displays the selected operating unit as the default in the subsequent pages irrespective of the value that you set for the MO: Default Operating Unit profile option. The selected operating unit restricts the valid list of values in applicable fields. |
| Source | Source of the lease application will be a lease quote or None. |
| Source ID | Lease quote number. If lease application is not created from a quote, this field is read only |
| Prospect | Defaulted from lease quote or selected from the list of valid prospects from Oracle TCA if created without a lease quote. |
| Program Agreement | Optional field in which you can select only active vendor program agreements for which the lease application details meet the eligibility criteria on the program. Criteria based on configuration or payment plan factors are validated later. Program Agreement effective dates must contain the lease application expected start date. |
| Industry | Optional field that defaults from party record associated to prospect. You can enter or update this field. If the TCA party has multiple industry values, then the industry marked Primary will default in for the prospect. |
| Valid From | Current date defaults in; can be updated. |
| Valid To | The expiration date for credit approval. The credit analyst will provide this date when entering and approving recommendations for the lease application's credit folder in Credit Management. |
| Amount Requested | Calculated by Lease and Finance Management, this represents the total financed amount on the quote on the lease application. This amount is calculated from the total amount financed on the quote configuration. You can not override this amount. |
| Lease Application Template | You select a lease application template from a list of values based on Customer Credit Classification, Industry, Org Unit, and Vendor Program on the lease application. Only Active templates, with effective dates within lease application term will appear. This field cannot be updated after Lease and Finance Management creates the lease application. |
| Status | Displays the status of the lease application. |
| Credit Line | Displays active credit lines for the customer account. The credit analyst can use this information to evaluate the lease application. If the lease application is approved and converted into a contract, the credit line reference is copied over to the contract. |
| Currency and Conversion Factors | Currency defaults from your ledger currency. You can enter conversion factor details if the currency you entered is different than the ledger currency. |
| Prospect Address | Defaults from the quote or can be entered. |
| Master Lease Number | Displays list of values for all active Master Leases for the same prospect party where the Expected Contract Start Date is past the Effective From date on the Master Lease and before the Effective To date. Any terms and conditions on the Master Lease Agreement will apply to a contract created from the Lease Application. |
| Pricing Details | Pricing on lease application must be accepted with the pricing valid dates associated with the quote. |
| Tax Details | Defaults in from sales quote or is calculated when you validate a new lease application. |
| Legal Entity | Identifies the first party on the contract. This field is mandatory, if you select Upfront Tax to calculate tax. |
| Configuration Details | Defaults in from sales quote or you must enter the details of assets or fees to be financed. |
| Financing Adjustments | Defaults in from sales quote or you must enter the details of any adjustments to the financed amounts. |
| Payment Details | Defaults in from sales quote or you must enter payments |
| Credit Management Data Points | You can enter data points on the Credit Checklist associated to a lease application. The data points will appear in the Credit Management case folder after you submit it for approval. |
You can update lease application details that defaulted from the lease sales quote if you used a quote as the creation source. However, if you update the lease quote details on a lease application, approval and acceptance of the quote must be repeated.
If you do not source a lease quote for your lease application, you can simply enter the deal details on the lease application. You can add effective and delivery dates, additional prospect information, configuration details, financing adjustments, and payment details.
You can enter credit information at any time in the lease application process before submitting the application to credit. Credit data fields in the lease application are rendered based on credit data points set up in the credit review checklist applicable to the lease application you used to create the lease application. In Credit Management, there can only be one applicable credit review checklist for a combination of Credit Review Type and Customer Credit Classification. The lease application template selected for a lease application determines the associated credit review checklist. When you save the credit data pages, the saved information will appear on the credit application in the case folder for the lease application in Credit Management after you submit the Lease Application for approval and the case folder is created. You can mark the credit data points as Mandatory or Optional on the credit review checklist. If you mark a data point as mandatory, it must be filled in on the Lease Application before you submit it for credit approval for your case folder to be created successfully.
For more information on the credit process, see Oracle Credit Management User Guide.
You can set up data points on the credit review checklist for the following categories and enter the data values on a lease application:
Applicant and business backgrounds
Financial data, such as Balance Sheet or Income Statement
Funding sources, such as Venture funding data, Collateral data, and Guarantors
Bank and trade references
Additional data entered as data points on the credit checklist, such as license number, awards and certifications, reputation in industry, environment factors for the client's business, and other perceived risks. You can associate data points to a function that will extract a value for the data point when the lease application is submitted as a credit request to Credit Management and the case folder is created. For more details on setting up extended data points, see Oracle Credit Management User Guide.
Once a lease sales quote for a lease opportunity has been accepted by a prospect, it can be used to create a lease application. You have the option of picking a lease sales quote as the source of a new lease application. When you select a sales quote as the source, the following rules apply:
Only a lease sales quote not yet used to create a lease application can be used.
Only one active lease application can be in process for a lease opportunity. A lease application is not considered in process if it has a status of Withdrawn or Credit Rejected.
Only a lease sales quote with a status of Accepted is displayed. Only one lease sales quote can be accepted for a lease opportunity.
The prospect on the lease sales quote must be the same as on the lease application.
The Expected Start Date on the sales quote should be on or after the lease application Effective From date.
When the details of an accepted lease sales quote transfer to the lease application, the status of the lease application becomes Pricing Accepted. If any of the pricing details on the lease application are updated, then the lease application status will change to Incomplete since new pricing will be required to submit for credit approval.
Before submitting the lease application for credit approval, you must price it to determine the yields and interest rate. Once the application is priced, you submit it for pricing approval. After you submit a lease application for pricing approval, you will receive a decision on pricing from the authority hierarchy set up in Lease and Finance Management through Approval Manager. When the lease application is approved for pricing, you can accept it on behalf of your prospect. A lease application rejected for pricing approval will be updated a status of Pricing Declined.
If you make changes on the pricing of a lease application after pricing is approved, the application must be priced again, and have pricing approval and customer acceptance before it can be submitted for credit approval.
After a lease application has been priced and approved, a summary of pricing details will appear on the summary page.
After a lease application has been priced and accepted, and the credit application sections have been completed, you can submit the lease application for credit evaluation. When a lease application is submitted, Lease and Finance Management initiates a credit request with Credit Management and the Credit Management workflow process begins. Credit Management creates a Case Folder and Credit Application for the lease application submitted. All of the data points you set up on the credit review checklist associated with the lease application template for your deal will be added to the case folder. The data point values may be those you entered on the credit application portion of the lease application or set up as functions that will derive or calculate other values. As part of the credit case folder creation workflow, any functions you associate to data points are called and the derived or calculated values are added to the case folder.
If you set up automatic scoring and decision rules on the credit review checklist, the application will be scored and recommendations assigned. If the application cannot be scored or no automation rules are assigned, a credit analyst will be assigned to manually evaluate the application.
The application is approved when the credit analyst adds recommendations to the credit folder and those recommendations are approved by an authorized approval authority. Although Credit Management allows you to set up and create new recommendations, there are several recommendations seeded that apply specifically to credit folders for deals originated in Lease and Finance Management.
You can update a lease application before it is either Submitted to Credit, Withdrawn, or Cancelled. No updates can be made to a lease application in any of the following statuses: Submitted to Credit, Credit Approved, Credit Rejected, Withdrawn, Converted to Contract, or Cancelled. You cannot update the legal entity if you have activated the lease application. You cannot update the Operating Unit once you create a lease application.
If you do not want to accept the credit decision, you can appeal a lease application. When a credit decision is made on the original lease application, the case folder will indicate whether an appeal can be made and what the expiration date is for the appeal. Both Approved and Rejected lease applications can be appealed since you may not want to accept one of the approval conditions. A new lease application linked to the original is created for appeal. You can select the credit recommendations on the original lease application that you would like to appeal. You can also update credit information on the new application before submitting it to credit for reevaluation. If the appealed lease application is approved, you can then convert either the original or the appealed lease application into a contract. If the appeal is rejected, you can resubmit or appeal the lease application again.
If conditions on a deal change, you can resubmit the lease application to provide new pricing and credit information. Both Rejected and Approved lease applications can be resubmitted. Lease and Finance Management creates a new lease application linked to the original when you resubmit. You can change the pricing or credit-related information and submit it to credit again. If your resubmit is approved, you can then convert either the original or the resubmitted lease application into a contract. If your resubmit is rejected, you can either book the original lease application or resubmit or appeal the lease application again.
You can withdraw a lease application that has not yet received a credit decision by selecting the lease application and submitting a withdrawal request. Lease and Finance Management sends the withdrawal notification to the credit analyst. When the credit analyst accepts the withdrawal notification, the lease application becomes Withdrawn. The withdrawal cannot be reversed. The credit analyst indicates the withdrawal reason and closes the case folder.
You can also cancel a lease application that already has a credit decision by selecting Cancel from the Action menu for that lease application and clicking Go. A cancellation cannot be reversed. Canceled lease applications cannot be used to create new contracts. You can also cancel a lease application that already has a credit decision by selecting Cancel from the Action menu for that lease application and clicking Go. A cancellation cannot be reversed. Canceled lease applications cannot be used to create new contracts.
Before a lease application can be cancelled, the contract must be cancelled. You cannot cancel lease applications with the following statuses: Submitted to Credit, Credit Rejected, Credit Approved, Converted to Contract, or Submitted for Pricing Approval.
Use credit lines to control your risk exposure when you want to extend credit to your customers for multiple transactions. You create a credit line without a Credit Management request by setting up and activating a credit line in Lease and Finance Management.
Lease and Finance Management allows you to set up and execute checklist items before you activate credit lines. A credit manager usually determines the items that are required to be included on a checklist for activating new credit lines. Items might represent such things as tasks or documents. As the Credit Manager, you determine the items in the checklists and control the users that can update the lists based on roles in the credit process.
You can also associate a funding request checklist template with a credit line. Then, each time you create a funding request for a contract associated to the credit line, a copy of the funding request checklist template is created for the request. The items on the checklist can be used to insure your credit line conditions are met with each funding requested.
Credit lines have a credit limit that controls how much financing can be approved for contracts associated with the credit line. Credit limits can be increased and decreased after the credit line has been activated.
You can update a credit line expiration date any time to prevent it from being used for deals with start dates occurring after the credit line expiration date.
Credit lines can also be associated to Master Lease Agreements. If a contract is not associated to a lease application or credit line, but is associated to the Master Lease, the credit line for the Master Lease is used to restrict the funding amounts for a lease contract.
Credit lines are either standard or revolving. A revolving credit line enables you to replenish the balance each time payments are received from a borrower, up to the preset limit, throughout the life of the credit line. Once the credit line expires, the revolving balance can be moved to a conventional loan type lease contract and set of for repayment. Funding requests with the type Borrower Payment are used to draw down a credit line. Standard credit lines are drawn down with asset and expense type fundings with each related funding request until the credit limit is reached or the line expires.
Lease and Finance Management also allows you to use warrants, representing stocks or stock options, as collateral against an established line of credit.
To establish a credit line for a customer, you create a line of credit in Lease and Finance Management for the customer. You then establish the credit limit amount. You can revise credit limits up or down for a particular credit line throughout the life of the credit line.
If the credit line is revolving, when the lessee makes a payment for the associated revolving loan contract, the amount of available credit increases by the paydown amount. For example, if a lessee has a line of credit for a million dollars and has two loans worth US$250,000 each against the line, the available line decreases to US$500,000. If the lessee pays off US$300,000 of the amount owed, the revolving credit line increases to US$800,000. When the life of the revolving credit line expires you convert the balance to a loan type lease contract and associate the assets and payments required to activate the new contract.
Standard credit lines are not revolving. As leases and loans are funded for contracts associated to the credit line, it is drawn down until there is no credit available or the credit line expires. Only contracts for the same customer account as the credit line can be associated with the credit line.
Before creating a credit line, customers must be set up in Oracle Receivables.
To create a credit line, navigate to Customers > Credit > Credit Lines. Click Create to open the Create Credit Line page. Enter the Credit Line details and click Apply. The following table describes Credit Line fields.
| Field | Description |
|---|---|
| Operating Unit | Operating unit assigned to the record.
Note: The list of values includes operating units assigned to the MO: Security profile. Note: The application displays the selected operating unit as the default in the subsequent pages irrespective of the value that you set for the MO: Default Operating Unit profile option. The selected operating unit restricts the valid list of values in applicable fields. |
| Number | Enter a unique credit line number. |
| Description | Optionally, describe the credit line. |
| Customer Name | Choose the customer to whom you are assigning a credit line from the list of values. |
| Customer Account | Select the account number of the customer. |
| Effective From | Mandatory field for beginning date of credit line. |
| Effective To | Mandatory field for end of credit line. Credit lines cannot be open-ended. |
| Currency | Choose the currency for the credit line. You may select a different currency for the credit line. Any contract associated with the credit line must have the same currency as the credit line. |
| Currency Conversion Type | If your credit line currency is the same as the ledger currency, you can ignore the currency conversion fields. If the credit line currency is not the same as the default ledger currency, select the currency conversion type from the list of values. |
| Currency Conversion Rate | If you selected User for the currency conversion type, enter the rate. |
| Currency Conversion Date | If you selected other than User for the currency conversion type, enter the conversion date to enable Lease and Finance Management to determine the appropriate currency conversion rate for the type selected. |
| Revolving | Select this checkbox if the credit line is revolving. Revolving credit lines can only be associated to contracts with a financial product having a book class of Revolving Loan. |
| Checklists | Optionally, associate checklists to the credit line. You can associate one checklist to be used for checking conditions to activate the credit line and one checklist as a funding checklist template. |
After you have entered a credit line for a customer, you must set the credit limit for the line. You can add or subtract amounts to the credit line at any point in its life cycle.
To create a credit limit, first select a credit line. In the Credit Line Details page of the Credit subtab in the Customers tab, click Credit Limit. Enter credit limit details. The following table describes Credit Limit fields.
| Field | Description |
|---|---|
| Nature | Select Addition or Reduction. For a new line of credit, select New Limit. For existing credit lines, select Add Item to add to the credit amount or Reduce to reduce it. |
| Effective Date | For new credit limits, this date corresponds with the Effective From date of the credit line. This date is displayed in the page header. |
| Note | You can add a brief description of, or any important details for, the credit limit. |
| Amount | Enter the credit limit amount. Do not include commas. |
| Update | Click Update to establish the credit limit. |
You can attach a warrant, which represents stocks or stock options, to a credit line to use as collateral in securing the credit amount. Lease and Finance Management records the relevant information regarding the stock or stock option for future reference
To attach a warrant, first select a credit line. Click Warrants in the Credit subtab menu of the Customers tab. Enter warrant details. Click Create to add the warrants to the credit line. The following table describes Warrants fields. Information you enter for fees or prices do not automatically generate any related transactions and are for informational purposes only.
| Field | Description |
|---|---|
| Fee Amount | If a fee is attached to the warrant, enter the fee amount. |
| Due Date | Date fee is due. |
| Type | Select Common or Preferred for the type of shares. |
| Number | Enter the number of shares of stock in the warrant. |
| Acquisition Date | Date the shares were acquired. |
| Expiration Date | Date the shares expire. |
| Strike Price | Enter the strike price of the stock options. |
| Initial Book Value Amount | Enter the total initial book value of the stock. |
| Initial Tax Value amount | Enter the total initial tax value of the stock. |
| Current Book Value Amount | Enter the current book value of the stock. |
| Current Tax Value Amount | Enter the total current tax value of the stock. |
Lease and Finance Management allows you to set up and execute checklists to track activities and action items for the process leading up to activating credit lines and approving funding requests. You determine the items in the checklists and control the users who can update the checklists based on roles and responsibilities in the credit and funding process.
To create checklists for use with Lease Applications, see Create Credit Checklist.
You create checklist templates so that you can use the same basic checklists many times. Depending on your profile options settings, you can modify checklists and approve credit line activation.
If you are the assigned Yes in the profile option OKL: Credit Approver, you can create or modify a checklist of required activities (for example, tasks, documents, and approvals) to be completed prior to activating a credit line or approving a funding request. Otherwise, you are only able to update the checked status of the items on the checklist.
You associate the credit line checklists to a credit line for actions to be completed prior to credit line activation. You can also associate a funding request checklist prior to activation of the credit line that will be used each time a funding request is submitted for a contract associated to the credit line.
Checklists are not part of the workflow that sends a credit request to Oracle Credit Management. You associate a credit line checklist to a credit line after the credit line has been entered in Lease and Finance Management, but before the credit line has become activated.
The scope of these checklists is limited to the credit line activation and funding approval process within Lease and Finance Management.
The main topics in this section are:
Associate a Checklist Template to a Credit Line
Mark Items as Mandatory or Recommended, and Activate Checklist
Activate a Credit Line with Checklists
The credit line approver adds a credit line checklist or funding request checklist template to the credit line during credit line creation. The purpose of the credit line checklist is to insure all required conditions are met before the credit line is activated. Only users with the profile option OKL: Credit Approver set to Yes can add or modify a checklist for a credit line. Other users may only update the checklist items as completed with a comment. When adding the checklists to the credit line, only the checklists from the checklist setups that are within the checklist setup effective dates may be selected.
The purpose of the funding request checklist template is to provide a checklist for each funding request submitted for a contract associated to the credit line. The template is copied each time a funding request is created for a contract associated to the credit line. The items on the checklist are conditions that must be met for the funding request to be approved. Only users with the profile option OKL: Funding Request Approver set to Yes can add, modify, and activate a checklist template for funding requests. Other users may only update the funding request checklist items as completed with a comment.
Before you can associate a checklist template to a credit line, the following tasks must be completed:
Item codes for potential checklist action items have been entered in the Oracle Application Developer Lookup Object Library.
The Profiles for the credit line Responsibility (Lease Super User, Operations Manager, Credit Approver) must enable the user to assign credit line checklists and funding request checklists templates to the credit line.
Checklist templates have been created on the Setup tab in Lease and Finance Management.
You must already have created a credit line with the status of New or Entered (cannot be Activated).
To associate a checklist template to a credit line, first select a credit line. In the Checklists region of the Credit Line Details page you can select a Credit Line Checklist Template and a Funding Request Checklist Template from the list of values. You may select either or both types of checklist templates to associate with this particular credit line. Click Update to save your work.
The credit line approver navigates to the credit line checklist instance or funding request checklist template summary and updates the mandatory flag for any line items as required. Recommended items are the line items that are not marked as mandatory. The credit line approver activates the credit line checklist or funding request checklist. The checklist and/or funding request checklist template receive Active status.
The credit line cannot be activated if no credit limit is entered for the credit line, or if the status for the Credit Line Checklist and/or Funding Request Checklist is New; the checklist status must be Active, if the mandatory items are not completed on the checklist.
The credit line approver may navigate to a credit line checklist and remove or add mandatory flags as appropriate until the credit line is activated. After the credit line is active, the checklist can no longer be updated.
For the funding request checklist, the credit line approver may update the mandatory flags on the funding request checklist template at any time, even if the credit line is active (but not expired or terminated), or the funding request template is active or expired. When the funding request submitter creates a funding request, an instance of the funding request checklist template is created.
The checklists are now available for the credit analyst to check off items as completed.
Before a checklist can be activated, the following tasks must have been completed:
A credit line must have been created with the checklists associated.
The profile responsibility must be set up to enable checklist template creation.
You can mark items as mandatory on the checklist provided that the necessary Lease and Finance Management profile options are set to Yes for credit line approver and funding request approver. On the Credit Lines Checklist or Funding Request Checklist Template pages, select the Mandatory checkbox for each item that you want to be required. Leave the checkbox blank for items that are not required and they remain on the checklist as Recommended items.
Click Update to save your work and Activate to activate the checklist.
To activate a credit line with checklists, select the credit line and click Activate.
After the credit line approver activates the credit line, an error message is given when any mandatory items on the credit line checklist are not checked off. You must go back and make the necessary changes, such as completing all mandatory items, before the credit line is activated. If all mandatory items are checked off but recommended items are not, a warning message is given, the credit line activation process continues, and the credit line status changes to Active.