What is Expected Renewal Retention for Lines of Credit and Letters of Credit?
The Expected Renewal Retention represents the probability that a particular Line of Credit or Letter of Credit product will be renewed. When pricing an opportunity, this value is used to apply factored renewals to the Income Statement for these products.
Effect of Expected Renewals on the Opportunity:
When pricing an opportunity that includes a Line of Credit or Letter of Credit and one or more loans with a longer term, the Expected Renewal Retention is used to apply a weighted renewal to the Income Statement. Renewals are factored in for the length of the longest loan specified in the scenario.
Setting the Expected Renewal Retention for LOCs and Letters of Credit:
When creating or editing a Line of Credit or Letter of Credit Product, there is an option in Payment Types to specify the "LOC/Letter of Credit Expected Renewal Retention".
By default, if you have not previously set this value or are creating a product for the first time, the Expected Renewal Retention is set conservatively at 0%, so no renewals will be factored in for the product.
For more information about Revolving Lines of Credit, visit Pricing a Revolving Line of Credit