Credit Facilities & Facility Limits
Two related but distinct ideas meet on this page:
- A facility limit is the ceiling the bank grants you, shared by a number of instruments — a loan here, a letter of guarantee there, a letter of credit — each of which reserves part of the ceiling, and the system tracks the consumed and remaining amounts.
- A credit facility is a standalone instrument: a revolving-drawdown agreement with the bank with its own value, interest and fees, issued, repaid and terminated through its own documents.
Required license
Credit facilities are part of the accounting-loans license — the same license that covers Bank Loans and Fixed Deposits.
Facility limit: the shared ceiling
On the Facility Limit screen (Banks > Credit Facilities > Facility Limit) the ceiling granted by a particular bank is defined, and its details are configured through the Facility Limit Config (Banks > Credit Facilities > Facility Limit Config).
As soon as a loan, letter of guarantee or LC is linked to a facility limit, it draws down from it at issue/opening; the system blocks any issue that would push the consumed amount over the ceiling. And because the three instruments share the same ceiling, the Details of banking facilities report (SYSR-LON002) gives you a unified picture of what's reserved across all of them.
Credit facility: from setup to termination
A credit facility is a revolving-drawdown instrument, and its cycle runs like this:
- Credit Facility Setting — the shared template: the interest-calculation method, the rule for allocating a payment between principal and interest, and the accounts.
- Credit Facility — the master file in its "Not Started" status.
- Credit Facility Issuance — activates the facility (it posts to the ledger, and the status flips to "In Progress").
- Credit Facility Payment — repaying an installment that gets split between principal and interest per the setting (it posts to the ledger).
- Credit Facility Termination — terminating the facility (status "Terminated").
The facility master file
On the Credit Facility screen (Banks > Credit Facilities > Credit Facility) the terms are defined: the linked setting, the supplier, bank and bank account, the credit facility value, the interest percentage and expected interest value, the fees percentage/value, and the start / end date. The file shows live tracking totals: total calculated interest value, total credit facility payments, total interest payments, and the credit-facility/interest remaining after payment.
Facility statuses: Not Started → In Progress → Terminated.
The setting
The Credit Facility Setting gathers the rules shared by similar facilities: the interest-calculation method (the days per year for credit-facility interest calculation option sets the calculation basis, default 365 — see Accounting configuration) and the rule for splitting each payment between principal and interest.
Issuance, payment and termination
Issuance activates the instrument and posts its effect (a debit/credit pair). Then each payment document splits its installment between principal and interest per the setting, posting via the sides: payment of credit-facility value debit/credit, payment of interest value debit/credit, and payment value debit/credit. Finally, the termination document closes the facility. (Where the accounts come from is in the Document terms reference.)
Reports
| Report | Answers |
|---|---|
| Details of banking facilities (SYSR-LON002) | What's reserved and remaining of the facility limits across loans, guarantees, credits and facilities. |
For Support
- "What's the difference between a facility limit and a credit facility?" — a facility limit is a ceiling shared by several instruments, while a credit facility is a standalone drawdown instrument with its own documents.
- "Issuing a loan/letter/LC was rejected because of the limit" — the consumed amount exceeds the linked facility-limit ceiling; check the Details of banking facilities report.
- "The facility interest calculation looks wrong" — check the days per year in Accounting configuration and the allocation rule in the facility setting.
- "Where do the payment accounts come from?" — from the Credit Facility Payment term; see Document terms.
- The accounting-processing mechanism is in How documents are processed into accounting effects.