Collateral agreement

A collateral agreement binds existing assets or personal suretyship to the loan contract as collateral. It consists of the following steps:

Creating or selecting an asset or suretyship person.
Connecting asset/suretyship to the loan contract.
Signing collateral agreement.

If you add an asset to a loan application/offer, the collateral agreement is automatically created and connected to the particular loan contract when the loan offer is accepted. In this case, you can edit a collateral agreement and sign it.

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Create with asset

To create a collateral agreement with asset:

Collateral > Create collateral agreement.
Click Asset to add a new one or find an existing asset.

Search for an existing asset or Create a new asset.

Click on the particular Asset ID to select the asset.
Search for the loan contract that requires an asset.

Click on the Contract ID to select a loan contract that requires an asset.

If there are multiple ownerships related to an asset you must select the relevant ownership.

Click Create.

Note that Agreement details section is custom and can be configured according to the needs of your organisation. See more in the custom fields and lookups section.

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Create with suretyship

To create a collateral agreement with suretyship:

Collateral > Create collateral agreement.
Click Suretyship to add a new or find an existing person.

Create or find an existing person.

Click on the Identification number to select a particular person.
Bind loan contract to person. Find an existing loan contract.

Click on the Contract number to select a loan contract that requires suretyship.
Enter the suretyship limit amount and description > Create.

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Find collateral agreement

There are different ways of finding collateral agreement:

Via Collateral menu,
Via Asset details,
Via Loan contracts,
Via Person details.

Collateral > Search agreements.
Fill in the search parameters > Search.
Click the Agreement ID to access the collateral agreement details.

Find collateral agreement via Asset details

Find asset that is used as a collateral.
Access asset details page.
Scroll to the Collateral agreements section.
Click the Agreement number to access the collateral agreement information.

Find collateral agreement via Loan contracts

Find the secure loan contract that is bound to some collateral through agreement.
Access the loan contract details.
From the content menu choose Collateral.
Click the Agreement number to access the collateral agreement details.

Find collateral agreement via Person details

Find person who is an owner of some collateral asset or is related as a suretyship to any agreement.
Access the person details.
From the content menu choose Collaterals.
Click the Agreement number to access the collateral agreement details.

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Edit collateral agreement

To edit an existing collateral agreement:

in question.
Modify the collateral agreement by clicking the icon.

On the collateral agreement page, you can modify some of the following parameters:

Collateral agreement number,
Collateral amount,
Pledge amount,
Suretyship limit,
(if there are related custom fields to the collateral agreement).

When you edit the collateral amount, the system shows a maximum collateral amount as a hint.

Also, you can add or remove:

Collateral,
Collateral usage,
Suretyship.

You can only modify and add usages until the collateral agreement is signed.

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Sign collateral agreement

To sign a collateral agreement you need to open it. You can open the collateral agreement via the Collaterals, Loans menu, Person module and Asset details.

Find asset that is used as a collateral.
Access asset details page.
Scroll to the Collateral agreements section.
Click the Agreement number to access the collateral agreement information.
Click the Sign agreement button.
Select the Signing date. If required, you can add notes and documents > Sign.

It is only possible to sign a collateral agreement in the Preparing status only.

BackOffice users with the SIGN_COLLATERAL_AGREEMENT privilege can sign collateral agreements.

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Discard collateral agreement

To discard a collateral agreement you need to open it. You can open the collateral agreement via the Collaterals, Loans menu, Person module and Asset details.

Find asset that is used as a collateral.
Access asset details page.
Scroll to the Collateral agreements section.
Click the Agreement number to access the collateral agreement information.
Click the Discard agreement button.
Select the Discarding reason. If required, you can add a comment > Discard.

Note that the Discarding reason parameter is a custom lookup code. You can manage its values by going to Administration > Settings > Lookups > COLLATERAL > Collateral agreement. Choose lookup type DISCARD_REASON.

You can discard the collateral agreement in the preparing status only.

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Close collateral agreement

To discard a collateral agreement you need to open it. You can open the collateral agreement via the Collaterals or Loans menu:

Find asset that is used as a collateral.
Access asset details page.
Scroll to the Collateral agreements section.
Click the Agreement number to access the collateral agreement information.
Click the Close agreement button.
Select the Closing date and Closing reason. If required, you can add a comment > Close.

Note that the Closing reason parameter is a custom lookup code. You can manage its values by going to Administration > Settings > Lookups > COLLATERAL > Collateral agreement. Choose lookup type CLOSE_REASON.

You can close the collateral agreement in the signed status only.

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