Published by LoanOps Compass. Independent educational content with fictional worked examples.
Material update and linked-source check: . This date applies to the named references and this guide’s added examples; it is not a claim of human expert review.
Editorial policy and correctionsPurpose
Give new users a practical, system-neutral foundation: how deals, facilities and outstandings relate; how events move through controlled workflows; and how to verify results without memorizing confidential screen sequences.
Before you begin
Prerequisites
- Basic commercial lending lifecycle knowledge
- Familiarity with borrower, facility, commitment and outstanding terminology
- Access only through an employer-authorized environment
- Your institution’s current procedures and authority matrix
Operational sequence
Workflow and validations
Orient to the hierarchy
Identify the borrower relationship, deal or agreement, facility and individual outstanding before reviewing activity.
Read before changing
Review current status, scheduled events, pending transactions, balances and exceptions.
Translate the instruction
Map the borrower or agent instruction to the correct servicing event and effective date.
Prepare under maker-checker control
Record the intended event with clear evidence and route it to the required independent reviewer.
Verify the completed result
Confirm status, cash, principal, accruals, availability, notices and accounting reflect the authorized outcome.
Troubleshooting
Common breaks and response
The expected transaction option is unavailable
Likely cause
The record status, effective date, user authority, prerequisite event or product configuration does not permit it.
Controlled response
Do not force an alternate route. Check status and prerequisites, then escalate through the approved support path.
Balances look correct but cash or accruals do not
Likely cause
A date, rate, settlement instruction or downstream interface differs from the booked event.
Controlled response
Contain further processing and reconcile the transaction across position, cash, accrual and accounting evidence.
Two similar records appear for the same borrower
Likely cause
The borrower has multiple deals, facilities, currencies or active outstandings.
Controlled response
Use authoritative identifiers and contractual attributes; never select a record from name similarity alone.
Connected impact
Downstream effects
- Cash and settlement queues
- Principal, commitment and availability positions
- Interest and fee accruals
- Accounting and regulatory feeds
- Borrower, agent and lender notices
Control record
Audit evidence
- Authenticated instruction
- Approved contractual or reference terms
- Maker-checker record
- Independent calculation where applicable
- Post-event position and cash reconciliation
Practical context
Scenario: a beginner receives a drawdown request
Before preparing anything, the operator identifies the correct legal borrower, agreement and facility; confirms availability and value-date rules; checks for pending activity; records the event under the required approval path; and verifies cash, principal and availability after release.
Knowledge check
Check your understanding
What is the safest first action when beginning any Loan IQ servicing task?Show answerHide answer
Worked example: one agreement, one revolver, three loans
Fictional training case: Cedar Learning Ltd has one lending agreement and a USD 10 million revolving facility. Two existing funded loans use USD 3 million and USD 1 million. A new authenticated request asks for a USD 2 million draw. The names, identifiers and amounts here are invented for learning; they are not customer records or instructions for a production system.
Think of the agreement as the common contractual relationship, the facility as the revolving limit, and each loan as an individual funded outstanding with its own dates and pricing. Loan A and Loan B already consume capacity. Loan C is the proposed draw. Creating a new loan does not create another USD 10 million commitment.
Assumptions: one currency, no other utilization, no sublimits, no holds, no borrowing-base restriction, and no repayments or commitment changes during this example. We ignore fees and interest in the principal arithmetic. Actual available-to-draw amounts can depend on additional contractual and system conditions.
| Position | Before draw | After completed draw |
|---|---|---|
| Revolving commitment | USD 10,000,000 | USD 10,000,000 |
| Loan A funded principal | USD 3,000,000 | USD 3,000,000 |
| Loan B funded principal | USD 1,000,000 | USD 1,000,000 |
| Loan C funded principal | USD 0 | USD 2,000,000 |
| Total funded principal | USD 4,000,000 | USD 6,000,000 |
| Simple unused capacity | USD 6,000,000 | USD 4,000,000 |
Reconcile the request, position and cash
Before processing, trace the USD 2 million instruction to the correct borrower, agreement and facility. Compare currency, value date, pricing choice and authorized settlement details. Look for an existing pending draw that could duplicate the request. Availability is not approval: USD 6 million of unused capacity does not establish that borrowing conditions, authority or payment checks have been satisfied.
After an authorized draw completes, the funded increase should be USD 2 million: USD 3 million + USD 1 million + USD 2 million = USD 6 million. Simple unused capacity should be USD 10 million − USD 6 million = USD 4 million. Compare those results with the approved instruction and transaction status rather than relying on a single displayed balance.
Under this example’s assumption of a single gross settlement with no deductions, cash confirmation should also support USD 2 million on the agreed value date. Match the settlement reference, recipient and currency; distinguish a payment prepared for release from a payment actually settled. Check the related accounting, notices and accrual start against their source terms. This is a conceptual reconciliation, not a vendor screen sequence.
Keep the instruction, reviewer decision, before/after position, cash reference and unresolved differences together. A numerical balance that looks right does not prove the right party was paid. Conversely, confirmed cash does not prove that principal and accruals were booked correctly.
Practice and explained answer
Practice: Loan C is booked for USD 2 million, but the matched cash confirmation shows USD 1.8 million. Should you automatically send another USD 200,000?
No. The USD 200,000 difference is an exception to investigate, not authority to send another payment. Check whether the confirmation is complete, the reference and value date match, a split settlement exists, or the instruction or booking is wrong. Prevent duplicate release, retain the evidence and escalate through the institution’s approved correction process. Only an independently authorized resolution can determine whether cash, booking, or another record needs correction. Do not reduce principal merely to force the records to agree.
Primary references and corrections
- Finastra: Loan IQ product scope
Describes commercial lending and servicing capabilities. It is not a step-by-step user manual and does not validate the fictional workflow, screen names or institutional procedures.
The examples and internal control records are original teaching material. They do not imply source endorsement. Read our editorial policy or report a correction with the page, statement and supporting source.
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