2 Loan Drawdown

This topic describes the overview of Loan Drawdown.

Corporate customers require funds from time to time for various purposes, such as, to invest in infrastructure, expand business operations at various locations, upgrade to the latest plant and machinery, acquire assets, maintain inventory, or to increase working capital. Financial institutions offer corporate customers specific facilities to meet their funding requirements. A facility is a type of loan, where the bank sanctions or reserves a certain amount of money for the corporate customer, for a specific period of time. The customer can obtain funds from the facility, in the form of loans, multiple times within the time frame, till the facility limit is reached. This function is referred to as loan drawdown.

Each facility is associated with an expiry date. Some facilities can be of the revolving type, where, the sanctioned amount is renewed upon expiry. A facility is also associated with a funding type, for determining the purpose of the drawdown. A few examples of funding types are, term finance, working capital finance, and supply chain finance. A main-line facility can also be further categorized into sub-line facilities, based on the customer’s requirement. For more information on credit facilities, refer the Facility Summary section in the Oracle Banking Digital Experience Corporate Credit Facility Servicing User Manual.