Create an Internal Loan

An internal loan will be created with a new authorization. If the loan was to an existing authorization then this task would very similar to the "Create a Loan Application" task to complete just the Debt Instrument section of the LOANM.

To create a Loan Setup (LOANS) document in order to create a new loan authorization, perform these steps:

1. Create a document with the LOANS Document Code on the Document Catalog.

2. Complete the Header section with any necessary information (there may not be the need for any).

   1. No particular Header field is mandatory nor is any required for this task. However, Document Name or Document Description can be conditionally required with Document Control (DCTRL).

   2. If the current Application Date should not be used, then manually enter a date in the Record Date field.

3. Complete the Authorization section where a row will already be inserted for you and complete it with information for your loan authorization.

   There are defaults for loans, which will be mentioned below, but this example will manually enter data.

   1. Complete the General Information tab.

   2. Check the Auto Generate ID flag for the document to create the Authorization Debt ID for you.

   3. Leave Authorization Name, Authorization Short Name, Authorization Status, Responsible Department, Authorization Date, Authorization Start Date, and Authorized Amount to default.

   4. No other General Information field is mandatory nor is any required for this task. However, Contact Code can be conditionally required with Document Control (DCTRL).

   5. Expand the Reporting Information tab.

   6. Enter/choose your desired Internal Loan value in the Debt Type field.

   7. No other Reporting Information fields are mandatory nor is any required for this task. However, you may have policy needs that dictate the completion of one or more of the other 9 fields.

4. Skip the Authorization COA section where a blank row will already be inserted for you. (This task assumes 1 loan for the authorization and no Loan Authorization Event Type is entered for your Internal Loan code selected from the Debt Type page.)

5. Navigate to the Debt Instrument section and click the Insert New Line action.

   1. Complete the General Information tab with all the necessary information on the loan with the following required fields:  Debt ID, Debt Instrument Name, Debt Instrument Short Name, Issue Date, and Principal.

   2. Set Debt Instrument Status to Active Loan to trigger selection by the Initial Debt Accounting and Debt Payment & Billing chains.

   3. Complete any other information required procedurally for this type of loan.

   4. Use the Save button to save the Debt Instrument data, which will infer the Debt Type from the Authorization that has the Major Type of Loan setting of Internal. This will trigger the document to create you a record on all the remaining document sections that apply to that type of loan.

6. Navigate to the Lender Information section and, if desired, populate the Vendor Code with the internal vendor code set up to track the ‘lender’ of the loan.  If not a common practice, then skip to step 7.

7. Navigate to the Lender COA section where you will create just one record for principal and interest. However, if the two should be recorded differently besides just the Revenue Sources inferred or you wanted to override those inferences, then multiple records would be created with the Principal and Interest values for Type of Payment.

   1. Complete the General Information tab.

   2. Leave the defaults for Type of Payment (ALL) and Percentage (100%).

   3. Enter any necessary information in the optional Accounting Template and Line Description fields.

   4. Enter the Bank that should be used when paying out the principal to the borrower and when collecting loan repayments.

   5. Complete the Fund Accounting and Detail Accounting tabs with COA that should be used for future loan accounting.

8. Navigate to the Borrower Information section and, if desired, populate the Customer Code with the internal customer code set up to track the ‘borrower’ of the loan.  If not a common practice, then skip to step 9.

9. Navigate to the Borrower COA section where you will create just one record for principal and interest. However, if the two should be recorded differently besides just the Objects inferred or you wanted to override those inferences, then multiple records would be created with the Principal and Interest values for Type of Payment.

   1. Complete the General Information tab.

   2. Leave the defaults for Type of Payment (ALL) and Percentage (100%).

   3. Enter any necessary information in the optional Accounting Template and Line Description fields.

   4. Enter the Bank that should be used when receiving the principal payout and when making loan repayments.

   5. Complete the Fund Accounting and Detail Accounting tabs with COA that should be used for future loan accounting.

10. Navigate to the Schedule section to enter information about the payment schedule(s). This internal loan is one that does not follow a predictive schedule, containing only one repayment without interest.

    1. Navigate to the Terms tab.

    2. Enter Other for Schedule Type.

    3. Check the Selected Schedule flag.

11. Navigate to the Schedule Details and click the Insert New Line button.

    Enter the following:

    1. Enter the expected date of repayment as the Scheduled Date.

    2. Select Regular Payment as the Schedule Detail Type.

    3. Enter the amount of Principal equal to the Principal entered for the Debt Instrument.

    4. Enter any amount of agreed upon interest, even if it is $0, in the Interest field.

12. Click the Validate button to validate for errors.

13. If errors exist, fix the errors and repeat Step 12.  If no errors exist, continue with Step 14.

14. Click the Submit button to submit the document.