Loan orders are underlying transactions of purchase orders.
Loan orders work similarly to standard loans, with their own characteristics (start and maturity dates, payment frequency, interest rate, etc.) and workflow.
Every action carried out on a loan order impacts the associated purchase order.
Prerequisites
Contact your Finance Active consultant to:
- Enable the Purchase Order transaction type
- Associate your user with the relevant role to be able to create loan orders
Navigate to the Debt & Derivatives Application
- Log in to your Fairways Debt account.
- Select a customer account.
- Navigate to Applications
> Debt & Derivatives.
Create a Loan Order in a Purchase Order
- Open an actual purchase order.
Note: You can only create loan orders for purchase orders located in the actual portfolio.
- Navigate to Loan Orders.
- Click New Loan Order.
- Complete the form with all relevant details.
Notes:
- Fields marked with an asterisk * are mandatory.
- Some fields are pre-filled using the purchase order details.
| Field | Description |
|---|---|
| Reference Code |
Unique reference of the transaction. Identifies the transaction in the portfolio. Note: The reference must be unique among all the entities managed in the account. |
| External Reference Code | Used by external systems to identify the transaction. Used when transactions are imported from or exported to another system. |
| Principal |
Principal amount of the loan. Note: This amount must be lower than the remaining amount from the purchase order, computed as follows: |
| Currency | Currency of the principal, defined at the purchase order level. |
| Borrower | Borrowing entity in the system, defined at the purchase order level. |
| Lender | Lending entity, defined at the purchase order level. Can be either internal (an entity in the system) or external (a commercial bank). |
| Field | Description |
|---|---|
| Start Date |
Unadjusted start date of the transaction. Note: The loan order start date must be equal to or later than the start date of the purchase order. |
| Field | Description |
|---|---|
| Immediate Consolidation |
Enables the immediate consolidation of the loan order. If this option is selected, the loan order will be consolidated as soon as it is validated by the lender: the consolidation amount will correspond to the total amount of the loan order, and the consolidation date will be the start date of the purchase order. |
| Field | Description |
|---|---|
| Index |
Name of the index used to calculate the rate value, e.g. FIXED for fixed rate. Note: The field beside displays depending on the index selected. |
| Interest Rate |
Fixed rate value in percentage. Note: This field only displays for fixed indexes. |
| Initial Interest Rate |
Initial rate of the custom index. Note: This field only displays for the custom index. |
| Spread | Spread (or margin) value in percentage. |
| Day Count Convention | Used to compute the day fraction of an interest accrual period. |
| Frequency | Frequency of the payments. |
- Enable Show Details after Validation to automatically open the new loan order profile once created.
- Click Apply to create the loan order.
The new loan order profile displays as a draft transaction.
- Send a validation request for your loan order to the lender:
- - either directly from the loan order profile:
- - or from the loan order line in the purchase order:
Notes:
- If the notification "Loan Order Validation Request" is set in your user settings, you will be notified each time you send a validation request to the lender.
- If the notification "Loan Order Validation" is set in your user settings, you will be notified upon validation of the request by the lender.
What's Next?
- Consolidate a Loan Order, if no immediate consolidation enabled during the loan order creation