What is drawdown in SAP FS-CML - Loans Management?

SAP Term: drawdown

• Component: FS-CML

• Component Name: Loans Management

• Description: A loan taken by the customer of a bank from the facility reserved for that customer. Drawdowns can be distributed to additional business partners related to the customer. A drawdown limit cannot exceed the available amount at the subfacility and facility levels. &EXAMPLE& A drawdown of US$ 1 million taken under: Subfacility A of US$ 2 million for the product group of short-term mortgage loans, and Facility of US$ 3 million with a 2% rate of commitment interest

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• Key Concepts: 
  Drawdown is a term used in the FS-CML Loans Management component of SAP. It refers to the process of withdrawing funds from a loan account. This process is initiated by the borrower and is usually done in multiple installments. The amount of each installment is determined by the loan agreement between the borrower and lender. 
  
  How to use it: 
  In order to use drawdown, the borrower must first request a loan from the lender. Once the loan has been approved, the borrower can then initiate drawdown by submitting a request to withdraw funds from their loan account. The amount of each installment will be determined by the loan agreement between the borrower and lender. 
  
  Tips & Tricks: 
  It is important to keep track of all drawdown requests and withdrawals in order to ensure that all payments are made on time and that no funds are over-withdrawn from the loan account. Additionally, it is important to ensure that all drawdown requests are approved by both parties before any funds are withdrawn. 
  
  Related Information: 
  Drawdown is closely related to other terms such as repayment, disbursement, and amortization. Repayment refers to the process of paying back a loan, while disbursement refers to the process of releasing funds from a loan account. Amortization refers to the process of spreading out payments over a period of time in order to reduce interest costs.