What is back-up collateral agreement in SAP FS-CMS - Collateral Management System?

SAP Term: back-up collateral agreement

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: A collateral agreement the collateral value of which is used whole or in part to enhance the value of another collateral agreement.

Smart SAP Assistant

• Key Concepts: 
  A back-up collateral agreement is a type of agreement used in the SAP FS-CMS Collateral Management System. It is a contract between two parties that provides additional security for a loan or other financial transaction. The back-up collateral agreement is used to ensure that the lender will be repaid in the event that the borrower defaults on the loan. 
  
  How to use it: 
  The back-up collateral agreement is used in conjunction with other collateral agreements, such as a primary collateral agreement. The back-up collateral agreement is typically used when the primary collateral agreement does not provide sufficient security for the lender. The back-up collateral agreement provides additional security by allowing the lender to take possession of the collateral if the borrower defaults on the loan. 
  
  Tips & Tricks: 
  When setting up a back-up collateral agreement, it is important to ensure that all parties involved understand their rights and obligations under the agreement. It is also important to ensure that all parties are aware of any potential risks associated with the agreement. 
  
  Related Information: 
  The SAP FS-CMS Collateral Management System provides a comprehensive set of tools for managing collateral agreements. It includes features such as automated document generation, automated monitoring of collateral agreements, and automated reporting. Additionally, it provides an integrated platform for managing multiple types of collateral agreements, including primary and back-up agreements.