What is hard covenant in SAP FS-FBS-CML-LWP - SAP Loans Workplace?

SAP Term: hard covenant

• Component: FS-FBS-CML-LWP

• Component Name: SAP Loans Workplace

• Description: An agreement that entitles the lender to terminate the contract and apply penalty margins or interest at the expense of the borrower.

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• Key Concepts: 
  A hard covenant is a type of loan agreement that requires the borrower to meet certain conditions in order to remain in good standing with the lender. These conditions are typically related to financial performance, such as maintaining a certain level of profitability or liquidity. If the borrower fails to meet these conditions, the lender may take action, such as calling in the loan or imposing additional fees.
  
  How to use it: 
  In SAP Loans Workplace (FS-FBS-CML-LWP), hard covenants are used to ensure that borrowers remain in compliance with their loan agreements. The system allows lenders to set up and monitor covenants, and provides alerts when a borrower is not meeting the requirements. This helps lenders take action quickly if necessary.
  
  Tips & Tricks: 
  When setting up hard covenants in SAP Loans Workplace, it is important to ensure that they are realistic and achievable for the borrower. This will help ensure that the borrower is able to meet their obligations and remain in good standing with the lender.
  
  Related Information: 
  For more information on hard covenants and how they are used in SAP Loans Workplace, please refer to the official documentation on SAP Help Portal.