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

SAP Term: drawdown limit

• Component: FS-CML

• Component Name: Loans Management

• Description: The maximum amount of money a client can borrow at any one time in a particular currency, as defined in the credit line. It must not exceed the loan limit defined in the credit line. It is a revolving limit, that is, the available credit decreases when the client takes out a loan, and increases again when the client repays the loan.

Smart SAP Assistant

• Key Concepts: 
  Drawdown limit is a feature of the FS-CML Loans Management component of SAP. It is a limit set by the lender on the amount of money that can be drawn down from a loan at any given time. This limit is set to ensure that the borrower does not exceed their borrowing capacity and to protect the lender from potential losses.
  
  How to use it: 
  The drawdown limit is set by the lender when they create the loan agreement. The borrower can then draw down funds up to this limit. The borrower must also ensure that they do not exceed this limit, as this could result in penalties or other consequences.
  
  Tips & Tricks: 
  It is important to keep track of the drawdown limit and ensure that it is not exceeded. This can be done by regularly checking the loan agreement and keeping track of all payments made against the loan.
  
  Related Information: 
  The drawdown limit is just one of many features of the FS-CML Loans Management component of SAP. Other features include loan repayment schedules, interest rates, and collateral requirements. Understanding these features can help borrowers make informed decisions about their loans and ensure that they are able to manage their finances effectively.