What is effective capital in SAP FS-CML - Loans Management?

SAP Term: effective capital

• Component: FS-CML

• Component Name: Loans Management

• Description: The amount calculated from the difference between the total of the paid disbursements and capital transfers and the total of the paid payoffs or repayments whose value date is not after the key date.

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• Key Concepts: 
  Effective capital is a term used in the FS-CML Loans Management component of SAP. It is the amount of capital that is available to be used for loan origination and servicing. This amount is calculated by taking into account the current loan portfolio, the current market conditions, and the expected future cash flows. 
  
  How to use it: 
  The effective capital calculation is used to determine the amount of capital that can be used for loan origination and servicing. This calculation takes into account the current loan portfolio, the current market conditions, and the expected future cash flows. The effective capital calculation can be used to determine the amount of capital that can be allocated to each loan in order to maximize returns while minimizing risk. 
  
  Tips & Tricks: 
  When calculating effective capital, it is important to consider all factors that could affect the amount of capital available for loan origination and servicing. This includes the current loan portfolio, market conditions, and expected future cash flows. Additionally, it is important to consider any potential changes in these factors over time in order to ensure that the effective capital calculation remains accurate. 
  
  Related Information: 
  For more information on effective capital and how it is used in FS-CML Loans Management, please refer to SAP's documentation on the topic. Additionally, there are many online resources available that provide further information on effective capital and its use in SAP software.