The Payoff/Renewal field gives you the ability to price a New Opportunity taking into consideration the settlement of existing accounts within a relationship.
PrecisionLender uses the Payoffs/Renewals field to calculate Net Funding and Net Commitment, visible in the Financial Statements within an Opportunity.
If your organization uses Relationship Awareness, a list of the Relationship’s active existing loan accounts will appear in the Payoff/Renewal window. Without Relationship Awareness, you can still input the Prior Balance and Prior Commitment of existing account(s) using the Payoff/Renewal window.
In This Article
- When to use the Payoff/Renewal field
- Using the Payoff/Renewal field with Relationship Awareness
- Using the Payoff/Renewal field without Relationship Awareness
- Conversion Loan Payoff/Renewal Amount
- Payoffs/Renewals on the Opportunity Dashboard
When to use the Payoff/Renewal field
- Refinancing an existing loan
- Example: A borrower wants to refinance an existing loan with a lower rate. Select the ‘Payoff’ box for the existing loan account, then price the loan refinancing as a New Opportunity.
- An existing loan is approaching Maturity and needs to be renewed.
- Example: A 12-month Operating Line of Credit is approaching its Maturity date and the borrower would like to extend the account for another year. Select this existing loan account in the Payoff/Renewal window to reflect this renewal.
- Adding additional money to an existing loan.
- Example: A borrower wants to increase the amount on an existing loan from $1m to $1.5m. By attaching the existing loan account to the new Opportunity for $1.5m, Net Funding is properly calculated as $500,000.
- Updating borrower or loan-specific inputs.
- Example: The borrower’s Risk Rating has changed and you would like to see the difference in ROE between the existing loan account and the new Opportunity when reprocessing the loan with updated inputs.
- Understanding the impact of losing existing business to competition.
- Example: A borrower wants to refinance an existing loan with a lower rate and is considering moving the account to the Bank down the street. Not only will you select the ‘Payoff’ box for the existing loan account, you also will mark the account ‘At Risk’ in the Payoff/Renewal window.
Using the Payoff/Renewal Window with Relationship Awareness
This section only applies if your organization has Relationship Awareness enabled.
When you link the new Opportunity to a Relationship, the Payoff/Renewal field expands to show a grid with all of the active existing loan accounts associated with that Relationship.
This allows you to indicate the individual account(s) that are associated with the new Opportunity. To make this selection, mark the ‘Payoff’ box on the left-most side of the existing accounts grid.
Data shown for the existing loan accounts includes: Maturity, Current Balance (Average Balance for Lines of Credit), and Current Commitment.
Note: Existing accounts will originally be filtered based on the product type of the new Opportunity. If there are no existing loans with the same product type, the grid will display All accounts. You can change this filter by selecting the ‘Show’ dropdown at the top of the Payoff/Renewal window.products.
Marking an existing account At Risk
You can also indicate accounts that are at risk of being lost to competition, which will be reflected for the entire Opportunity and can be used to understand the impact of winning or losing the deal.
To mark an account at risk, select the ‘At Risk’ box on the right-most column of the grid.
Loans that have been marked as ‘Payoff’ or ‘At Risk’ in the opportunity or that will be paid off by any loan in the pipeline scenario show that Payoff/At Risk status on the Relationship Tab.
Using the Payoff/Renewal Window without Relationship Awareness
If your organization does not use Relationship Awareness, or if there is a Relationship that does not exist in PrecisionLender, you can still use the Payoff/Renewal window to enter the amount of the Prior Balance and Prior Commitment.
Did You Know?
The Full Opportunity printout includes the Opportunity Payoff/Renewal amount on the first page, and the individual amounts on each loan page.
Conversion Loan Payoff/Renewal Amount
PrecisionLender automatically calculates the Payoff/Renewal amount for your Conversion Loan as the retained end balance of the primary loan. This value is not editable, but will reflect any changes you make to the construction loan's Draw Schedule or Participations.
Payoffs/Renewals in the Opportunity Dashboard
The Opportunity Dashboard has the ability to show or hide Opportunities with Payoffs/Renewals. This allows you to toggle between all production and pipeline Opportunities (Payoffs/Renewals included), or just new business Opportunities (Payoffs/Renewals excluded).
Similarly, the Opportunity Dashboard Export window allows you to include or exclude Payoffs/Renewals from the report.
- What are Gross and Net Funding in PrecisionLender?
- Relationship Awareness - Overview and FAQs
- The Relationship Pricing Tab
- Pricing Conversion and Construction Loans