Setting Up Portfolio Types for Commercial Loans

Using the Portfolio Administration view, administrators can set up the commercial loan portfolios that are used to group similar types of commercial loans. For example, an administrator might set up Automobile, Manufacturing, and Chemical portfolio types.

In this view the administrator can also set the limit and utilization of each portfolio type. For example, an administrator might set the limit for an automobile portfolio at 100 million dollars. As a result, the organization’s combined loan total for the automobile industry must not exceed 100 million. The utilization captures how much the bank already lends to the automobile industry.

After the appropriate portfolios are set up, end users can then review the portfolios in the Request Summary view to see the financial institution’s exposure in each industry.

To set up a commercial loan portfolio

1. Navigate to the Administration - Finance screen, and then the Commercial Loan view.

2. Click the Portfolio Administration view tab.

3. To create a new portfolio type, add a record in the Loan Portfolio Type list, and complete the necessary fields as described in the following table.

   Note: Modify an existing portfolio by selecting a record in the Portfolio Administration list, and updating the record as needed.

   Field	Comments
   Limit	Financial organization’s limit for combined commercial loans in this portfolio.
   Portfolio Type	Name for the portfolio.
   Utilization	Captures the current exposure of the financial organization within the portfolio.

After setting up the appropriate portfolios for commercial lending, administrators can add underwriting standards to the portfolios. These standards are used by the credit committee when determining whether to finance the loan. An example of a portfolio underwriting standard is a leverage of less than 30% for a software portfolio.

The values in this view are displayed in the Portfolio Administration view tab.