Letter of Credit & Reserves

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Loan Servicing / Loan Activity / Letter of Credit & Reserves

A Letter of Credit & Reserves may be issued by another lender as a promissory note or guarantee of payment. If such a letter exists, you may add it here. The letter of credit value is deducted from the BBC base availability value. This value can be viewed under Management reports, and BBC report. The summation of the Active Letter of Credit Limits is displayed under Management Report.

The Letter of Credit increases the outstanding loan balance and reduces the net borrowing base availability in the BBC. The Loan Reserves reduce the outstanding loan balance and increase the net borrowing base availability in the BBC.

Navigation: Loan Servicing → Loan Activity → Letter of Credit & Reserves

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Fields and Descriptions

Fields	Descriptions
Letter of Credit
Letter of Credit #	Specifies the Letter of Credit name.
Description	Specifies the description of the Letter of Credit.
Expiry Date	Specifies the expiry date of the Letter of Credit. If the expiry date is not selected, an error notification appears. Refer to the screenshotRefer to the screenshot
Amount	Specifies the Letter of Credit amount.
Status	Specifies the status of LOC such as Active or Inactive. If the date is expired but the status is active, then the system displays the LOC in BBC Availability page. The system removes the LOC from BBC Availabilty page if the status is made as inactive.
LC Limit	Specifies the Letter of Credit limit value. LC Limit value should be greater that the value entered in Amount field. If the LC limit value is lesser than the value entered in the Amount field, an error pop-up appear. Refer to the screenshotRefer to the screenshot
Loan Reserves
Reserve Title	Specifies the title name of Loan Reserves.
Description	Specifies the description of Loan Reserves.
Amount	Specifies the Loan Reserves amount.

To create a new letter of credit, perform these steps:

1. Click the button.

2. In the Letter of Credit # field, enter the LoC name.

3. In the Description field, enter the description for the LoC.

4. In the Expiry Date field, select the expiry date of the LoC.

5. In the Amount field, enter the amount of LoC.

6. In the Status field, select the status of the LoC such as Active or Inactive.

7. In the LC Limit field, enter the Letter of Credit limit value.

8. Click the Save button button. The Letter of credit is successfully created and saved.

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Note To save the Letter of credit details, you need to specify the expiry date of LoC. The selection of the Expiry Date is mandatory.

To edit the letter of credit, perform these steps:

1. Double-click on the LOC field that you wish to edit.

2. Edit the field as required.

3. Click the Save button icon. The LOC is updated successfully and a message “Letter of Credits was successfully updated” appears.

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The Letter of Credit & Reserve details are displayed in Audit Log Report.

To delete the Letter of Credit, perform these steps:

1. Select the letter of credit row that you wish to delete.

2. Click the icon. A pop-up window appears. Refer to the screenshotRefer to the screenshot

3. Click the button if you want to cancel the letter of credit deleting process. (or)

4. Click the Delete button button to delete the Letter of credit field. The Letter of Credit is successfully deleted and a message “Letter of Credit was successfully deleted” appears.

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Success prompt - Letter of credit deleted

The letter of credit can be deleted only if the letter of credit is used on unapproved BBC. The letter of credit can only be inactivated and cannot be deleted if the letter of credit is used on approved BBC.

If user tries to delete the letter of credit which is used on approved BBC, then the system shows an error notification.

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To create new Loan Reserves, perform these steps:

1. Click the Add button button.

2. In Reserve Title field, enter the title name of Loan Reserves.

3. In Description field, enter the description of Loan Reserves.

4. In Amount field, enter the Loan Reserve amount.

5. Click the Save button button. The Loan Reserve is successfully created and a message “Loan Reserve was successfully created” appears.

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To edit the Loan Reserves, perform the steps:

1. Double-click on the Loan Reserve field that you wish to edit.

2. Edit the field as required.

3. Click the button. The Loan Reserve is updated successfully and a message “Loan Reserve was successfully updated” appears.

Refer to the screenshot:

To delete the Loan Reserves, perform these steps:

1. Select the loan reserve row that you wish to delete.

2. Click the button. A pop-up window appears. Refer to the screenshotRefer to the screenshot

3. Click the Cancel button button if you want to cancel the loan reserve deleting process. (or)

4. Click the Delete button button to delete the loan reserve field. The Loan Reserve is successfully deleted and a message “Loan Reserve was successfully deleted” appears.

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To Search the Letter of Credit/Loan Reserve data, perform the steps:

1. Click the button. A search pop-up window appears.

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2. Populate all the required fields.

Note Click the Add button button to add new row field and click the Delete button button to remove the field row.

3. Click the button to search the loan reserve data based on the selected options. (or)

4. Click the button to reset field that you have selected. The system displays the Letter of Credit/loan reserve data based on the search criteria.