Bank Facility Agreement
The agreement with one bank for a period: which facilities it gives and the limit of each. Guarantees and letters of credit pick the agreement they are drawn under.
What it is for
It records what the bank agreed, so a guarantee or a letter of credit can name the agreement it falls under. On a Letter of Credit, picking the agreement brings in the facility and its limit.
The rule people get wrong: the limits are recorded, not enforced. No document checks its value against the limit today.
Every field in plain words
Header
| Field | What it means | What to put |
|---|---|---|
| Agreement | The agreement code | Required |
| Name | A name for it | Optional |
| Reference no | The bank's reference, such as the sanction letter number | Optional |
| Date From, Date To | The period of the agreement | Both required |
| Bank | The bank | From Bank |
| Account Number | The company's account at that bank | From Bank Accounts, for the bank picked |
| Responsibility Central, Responsible | Who looks after the agreement | Optional |
| Currency | The currency of the limits | Optional |
Lines
| Field | What it means | What to put |
|---|---|---|
| Line # | Line number | Automatic |
| Facility | The facility | From Bank Facilities |
| Limit | The agreed limit | The amount |
How to configure it
One agreement per bank and period. The screen allows Create, Edit and Delete.
Scenarios
- A contractor holds a guarantee line and a letter of credit line with one bank. One agreement with two lines, each with its limit.
What it is connected to
- Letter of Guarantee and Letter of Credit - name the agreement.