Business/SME Loan - V2 Configuration

Product Type: Business & SME Lending
Use Case: Working capital, business expansion, equipment financing
Typical Amount: â‚¦500,000 - â‚¦100,000,000
Typical Tenor: 12-84 months
Interest Rate: 18% - 30% per annum

Overview

Business and SME loans are designed for small and medium enterprises requiring capital for business operations, expansion, or equipment purchases. These products typically require collateral and comprehensive business documentation.

Key Features

Collateral required (120% coverage ratio typical)
Multi-level approval workflow
Business documentation mandatory
Debt Service Coverage Ratio (DSCR) assessment
Sector restrictions and preferences
Tranche disbursement option
Quarterly monitoring and reporting
Flexible moratorium periods

YAML Field Reference

Basic Information Section

Field Name	Data Type	Required	Description	Example
`productCode`	String	âœ… Yes	Unique business loan product code	`"BL-SME-001"`
`productName`	String	âœ… Yes	Display name	`"SME Working Capital Loan"`
`description`	String	No	Detailed description	`"Working capital for small businesses"`
`isActive`	Boolean	No	Product status	`true`
`loanProductType`	String	No	Loan type	`"FixedTermLoan"` or `"TranchedLoan"`
`lineOfBusiness`	Enum	No	Business classification	`"Commercial"`

Loan Tenure Section

Field Name	Data Type	Required	Description	Example
`minimumMonths`	Integer	âœ… Yes	Minimum tenor	`12`
`maximumMonths`	Integer	âœ… Yes	Maximum tenor	`84`
`defaultMonths`	Integer	No	Default tenor offered	`36`

Principal Range Section

Field Name	Data Type	Required	Description	Example
`minimumAmount`	Decimal	No	Minimum loan amount	`500000`
`maximumAmount`	Decimal	No	Maximum loan amount	`100000000`
`defaultAmount`	Decimal	No	Default amount	`5000000`

Interest Configuration Section

Field Name	Data Type	Required	Description	Example
`isEnabled`	Boolean	âœ… Yes	Whether interest is charged	`true`
`rate.default`	Decimal	âœ… Yes	Default rate (%)	`24.0`
`rate.minimum`	Decimal	No	Minimum rate (%)	`18.0`
`rate.maximum`	Decimal	No	Maximum rate (%)	`30.0`
`calculationMethod`	Enum	âœ… Yes	Calculation method	`"DecliningBalance"`
`moratoriumInterestCalculation`	Enum	No	Interest during moratorium	`"Capitalized"`

Collateral Configuration Section

Field Name	Data Type	Required	Description	Example
`isRequired`	Boolean	âœ… Yes	Collateral mandatory	`true`
`types[]`	Array	âœ… Yes	Accepted collateral types	`["Property", "Equipment", "Inventory"]`
`coverageRatio`	Decimal	âœ… Yes	Required coverage (%)	`120`
`minimumCoverageRatio`	Decimal	No	Minimum acceptable (%)	`100`
`maximumCoverageRatio`	Decimal	No	Maximum allowed (%)	`200`
`valuationRequired`	Boolean	No	Require professional valuation	`true`
`valuationValidityDays`	Integer	No	Valuation validity period	`180`
`insuranceRequired`	Boolean	No	Require collateral insurance	`true`

Collateral Types: Property, Equipment, Inventory, Receivables, Guarantor, CashDeposit, Shares

Business Eligibility Section

Field Name	Data Type	Required	Description	Example
`minimumBusinessAge`	Integer	No	Min years in operation	`2`
`minimumAnnualRevenue`	Decimal	No	Min annual turnover	`5000000`
`maximumDebtToEquityRatio`	Decimal	No	Max D/E ratio	`3.0`
`minimumDSCR`	Decimal	No	Min Debt Service Coverage Ratio	`1.25`
`allowedSectors[]`	Array	No	Permitted business sectors	`["Manufacturing", "Trading", "Services"]`
`restrictedSectors[]`	Array	No	Prohibited sectors	`["Gambling", "Tobacco"]`
`preferredSectors[]`	Array	No	Sectors with better rates	`["Agriculture", "Technology"]`
`requiredDocuments[]`	Array	âœ… Yes	Mandatory documentation	See below

Required Business Documents:

requiredDocuments:
  - "CACRegistration"
  - "TaxClearance"
  - "AuditedFinancials2Years"
  - "BankStatements12Months"
  - "BusinessPlan"
  - "BoardResolution"
  - "DirectorIdentification"

Approval Workflow Section

Field Name	Data Type	Required	Description	Example
`levels[]`	Array	âœ… Yes	Approval levels configuration	See sample YAML
`levels[].name`	String	âœ… Yes	Level name	`"Branch Manager"`
`levels[].maxAmount`	Decimal	âœ… Yes	Max amount for this level	`5000000`
`levels[].minApprovers`	Integer	âœ… Yes	Required approvers	`1`
`levels[].roles[]`	Array	âœ… Yes	Authorized roles	`["BranchManager"]`
`requireCreditCommittee`	Boolean	No	Require committee above threshold	`true`
`creditCommitteeThreshold`	Decimal	No	Amount triggering committee	`20000000`

Disbursement Configuration Section

Field Name	Data Type	Required	Description	Example
`allowTrancheDisbursement`	Boolean	No	Enable tranche/phased release	`true`
`maximumTranches`	Integer	No	Max number of tranches	`5`
`trancheRequirements`	Object	No	Requirements per tranche	See sample
`disburseTo`	Enum	No	Disbursement destination	`"CustomerAccount"` or `"SupplierDirect"`
`requireUtilizationReport`	Boolean	No	Require fund usage report	`true`

Monitoring & Reporting Section

Field Name	Data Type	Required	Description	Example
`requirePeriodicReporting`	Boolean	No	Mandate periodic reports	`true`
`reportingFrequency`	Enum	No	Report frequency	`"Quarterly"`
`requiredReports[]`	Array	No	Types of reports	`["FinancialStatements", "UtilizationReport"]`
`siteVisitRequired`	Boolean	No	Require site inspections	`true`
`siteVisitFrequency`	Enum	No	Visit frequency	`"SemiAnnual"`

Restructuring & Moratorium Section

Field Name	Data Type	Required	Description	Example
`allowMoratorium`	Boolean	No	Allow grace period	`true`
`moratorium.maxMonths`	Integer	No	Max moratorium period	`6`
`moratorium.type`	Enum	No	Moratorium type	`"InterestOnly"` or `"Full"`
`allowRestructuring`	Boolean	No	Allow loan restructuring	`true`
`restructuring.maxTimes`	Integer	No	Max restructuring times	`2`
`restructuring.fee`	Decimal	No	Restructuring fee (%)	`1.0`

Complete Sample YAML Configuration

basicInfo:
  productCode: "BL-SME-WKCAP-001"
  productName: "SME Working Capital Loan"
  description: "Working capital financing for small and medium enterprises"
  isActive: true
  loanProductType: "FixedTermLoan"
  repaymentAllocationOrder: "FEES_PENALTY_INTEREST_PRINCIPAL"
  lineOfBusiness: "Commercial"
  currencyCode: "NGN"

loanTenure:
  minimumMonths: 12
  maximumMonths: 84
  defaultMonths: 36

principalRange:
  minimumAmount: 500000
  maximumAmount: 100000000
  defaultAmount: 5000000

interestConfig:
  isEnabled: true
  rate:
    default: 24.0
    minimum: 18.0
    maximum: 30.0
  calculationMethod: "DecliningBalance"
  deductionMethod: "PaymentDueDate"
  rateTerms: "PerYear"
  moratoriumInterestCalculation: "Capitalized"

repaymentConfig:
  frequency: "Monthly"
  allocationOrder: "FEES_PENALTY_INTEREST_PRINCIPAL"
  principalCollectionInterval: 1
  firstDueDateOffset: 30

fees:
  - code: "PROC_FEE"
    name: "Processing Fee"
    feeType: "DeductedDisbursement"
    calculationType: "PercentOfPrincipal"
    value: 2.0
    minimum: 10000
    maximum: 500000
    glAccountId: 40001
  
  - code: "APPR_FEE"
    name: "Appraisal Fee"
    feeType: "UpfrontDisbursement"
    calculationType: "Flat"
    value: 50000
    glAccountId: 40002
  
  - code: "LEGAL_FEE"
    name: "Legal Documentation Fee"
    feeType: "UpfrontDisbursement"
    calculationType: "PercentOfPrincipal"
    value: 0.5
    minimum: 20000
    maximum: 200000
    glAccountId: 40003

collateralConfig:
  isRequired: true
  types:
    - "Property"
    - "Equipment"
    - "Inventory"
    - "Receivables"
  coverageRatio: 120
  minimumCoverageRatio: 100
  maximumCoverageRatio: 200
  valuationRequired: true
  valuationValidityDays: 180
  insuranceRequired: true
  
businessEligibilityConfig:
  minimumBusinessAge: 2
  minimumAnnualRevenue: 5000000
  maximumDebtToEquityRatio: 3.0
  minimumDSCR: 1.25
  
  allowedSectors:
    - "Manufacturing"
    - "Trading"
    - "Services"
    - "Agriculture"
    - "Technology"
    - "Healthcare"
  
  restrictedSectors:
    - "Gambling"
    - "Tobacco"
    - "Weapons"
  
  preferredSectors:
    - "Agriculture"
    - "Technology"
    - "Export"
  
  requiredDocuments:
    - "CACRegistration"
    - "TaxClearance"
    - "AuditedFinancials2Years"
    - "BankStatements12Months"
    - "BusinessPlan"
    - "BoardResolution"
    - "DirectorIdentification"
    - "ProofOfBusinessAddress"

approvalWorkflow:
  levels:
    - name: "Branch Manager"
      maxAmount: 5000000
      minApprovers: 1
      roles:
        - "BranchManager"
    
    - name: "Regional Manager"
      maxAmount: 20000000
      minApprovers: 1
      roles:
        - "RegionalManager"
        - "ZonalHead"
    
    - name: "Credit Committee"
      maxAmount: 100000000
      minApprovers: 3
      roles:
        - "HeadOfCredit"
        - "ChiefRiskOfficer"
        - "ManagingDirector"
  
  requireCreditCommittee: true
  creditCommitteeThreshold: 20000000

disbursementConfig:
  allowTrancheDisbursement: true
  maximumTranches: 5
  trancheRequirements:
    firstTranche:
      minimumPercentage: 30
      documentRequired: "BoardResolution"
    subsequentTranches:
      requireUtilizationReport: true
      requireSiteVisit: true
      milestoneCompletion: true
  disburseTo: "CustomerAccount"
  requireUtilizationReport: true

monitoringConfig:
  requirePeriodicReporting: true
  reportingFrequency: "Quarterly"
  requiredReports:
    - "FinancialStatements"
    - "UtilizationReport"
    - "StockReport"
  siteVisitRequired: true
  siteVisitFrequency: "SemiAnnual"

moratoriumConfig:
  allowMoratorium: true
  maxMonths: 6
  type: "InterestOnly"
  interestTreatment: "Capitalized"

restructuringConfig:
  allowRestructuring: true
  maxTimes: 2
  restructuringFee: 1.0
  requireBoardApproval: true
  maximumTenorExtension: 24

penaltyConfig:
  isEnabled: true
  tolerancePeriod: 5
  calculationMethod: "OverduePrincipal_DaysLate_Rate"
  rate:
    default: 3.0
    minimum: 2.0
    maximum: 5.0

notificationsConfig:
  sendApplicationConfirmation: true
  sendApprovalNotification: true
  sendDisbursementNotification: true
  sendRepaymentReminders: true
  sendMonitoringReminders: true
  reminderDaysBefore: 7
  channels:
    sms: true
    email: true
    push: false

Use Cases & Examples

Example 1: Manufacturing SME Working Capital

Scenario: Manufacturing company needs â‚¦10M for raw materials.

Business Profile:

Annual Revenue: â‚¦50M
In operation: 5 years
Sector: Manufacturing
DSCR: 1.5

Configuration:

principalRange:
  requestedAmount: 10000000

collateralConfig:
  provided:
    - type: "Equipment"
      value: 15000000  # 150% coverage
    - type: "Inventory"
      value: 5000000

interestConfig:
  rate:
    approved: 22.0  # Lower rate for manufacturing (preferred sector)

approvalWorkflow:
  approvedBy: "Regional Manager"  # â‚¦10M falls in second tier

Monthly Repayment (36 months, 22% p.a.):

Monthly Rate = 22% / 12 = 1.833%
Monthly Payment = â‚¦10M Ã— [0.01833 Ã— (1.01833)^36] / [(1.01833)^36 - 1]
Monthly Payment â‰ˆ â‚¦364,000

Total Repayment: â‚¦13.1M
Total Interest: â‚¦3.1M

Example 2: Trading Business with Tranche Disbursement

Scenario: Import/export company needs â‚¦25M in 3 tranches.

Configuration:

principalRange:
  totalAmount: 25000000

disbursementConfig:
  allowTrancheDisbursement: true
  tranches:
    - tranche: 1
      amount: 10000000  # 40% - Initial working capital
      requirement: "Signed supply contracts"
    
    - tranche: 2
      amount: 10000000  # 40% - After first shipment
      requirement: "Proof of first shipment + utilization report"
    
    - tranche: 3
      amount: 5000000  # 20% - Final tranche
      requirement: "Sales report + stock verification"

approvalWorkflow:
  approvedBy: "Credit Committee"  # â‚¦25M requires committee

Example 3: Business with Moratorium Period

Scenario: New production line installation requires 6-month moratorium.

Configuration:

loanTenure:
  totalMonths: 42  # 36 months + 6 moratorium

moratoriumConfig:
  allowMoratorium: true
  months: 6
  type: "InterestOnly"
  interestTreatment: "Capitalized"

repaymentSchedule:
  months1to6: "No payment (interest capitalized)"
  months7to42: "Principal + Interest repayment"

Impact:

Original Loan: â‚¦10M
Interest during moratorium: â‚¦10M Ã— 24% Ã— 6/12 = â‚¦1.2M
New Principal: â‚¦11.2M
Repayment Period: 36 months
Monthly Payment: â‰ˆ â‚¦408,000

DSCR Calculation Example

Debt Service Coverage Ratio measures ability to service debt.

businessEligibilityConfig:
  minimumDSCR: 1.25

Calculation:

DSCR = Net Operating Income / Total Debt Service

Example:
  Annual Revenue: â‚¦50M
  Operating Expenses: â‚¦35M
  Net Operating Income: â‚¦15M
  
  Loan Amount: â‚¦10M
  Interest Rate: 24%
  Tenor: 36 months
  Monthly Payment: â‚¦364,000
  Annual Debt Service: â‚¦4.37M
  
  DSCR = â‚¦15M / â‚¦4.37M = 3.43

Result: âœ… APPROVED (3.43 > 1.25)

Risk Categories:

DSCR < 1.0: âŒ Cannot service debt
DSCR 1.0-1.25: âš ï¸ High risk
DSCR 1.25-2.0: âœ… Acceptable
DSCR > 2.0: âœ…âœ… Low risk

Approval Workflow Example

approvalWorkflow:
  levels:
    - name: "Branch Manager"
      maxAmount: 5000000
      
    - name: "Regional Manager"
      maxAmount: 20000000
      
    - name: "Credit Committee"
      maxAmount: 100000000

Routing Logic:

Loan Amount â‰¤ â‚¦5M â†’ Branch Manager
â‚¦5M < Amount â‰¤ â‚¦20M â†’ Regional Manager
Amount > â‚¦20M â†’ Credit Committee (3 approvers minimum)

Example Workflow:

Application: â‚¦15M SME Loan

Step 1: Branch â†’ Preliminary Review
Step 2: Credit Analysis â†’ DSCR, Collateral Verification
Step 3: Regional Manager â†’ Final Approval (within authority)
Step 4: Disbursement â†’ After documentation

Timeline: 7-14 days

Collateral Verification Process

Required Coverage: 120%

collateralConfig:
  coverageRatio: 120
  valuationRequired: true
  insuranceRequired: true

Example:

Loan Amount: â‚¦10M
Required Collateral Value: â‚¦10M Ã— 120% = â‚¦12M

Provided Collateral:
  Property: â‚¦8M (professional valuation)
  Equipment: â‚¦5M (current market value)
  Total: â‚¦13M

Coverage Ratio: â‚¦13M / â‚¦10M = 130% âœ… APPROVED

Valuation Requirements:

Professional valuers from approved panel
Valuation valid for 180 days
Insurance must cover full collateral value
Annual revaluation for long-tenor loans

Sector-Based Pricing

businessEligibilityConfig:
  preferredSectors:
    - "Agriculture"
    - "Technology"
    - "Export"

Rate Adjustment:

Base Rate: 24%

Preferred Sectors (Agriculture, Tech, Export):
  Rate Discount: -2%
  Final Rate: 22%

Standard Sectors (Manufacturing, Trading):
  Final Rate: 24%

Higher Risk Sectors:
  Rate Premium: +2%
  Final Rate: 26%

Restricted Sectors:
  Application: REJECTED

Monitoring & Reporting Requirements

monitoringConfig:
  requirePeriodicReporting: true
  reportingFrequency: "Quarterly"

Required Reports:

Quarterly:

Financial Statements (P&L, Balance Sheet)
Fund Utilization Report
Stock/Inventory Report
Aged Receivables Report

Semi-Annual:

Site Visit Report
Collateral Inspection
Business Operations Review

Annual:

Audited Financial Statements
Tax Clearance Certificate
Updated Business Plan

Non-Compliance Consequences:

Warning letter (first instance)
Penalty fee (second instance)
Loan recall (repeated non-compliance)

Validation Rules

Business Validation

Code Removed

Implementation details removed for security.

Contact support for implementation guidance.

Approval Authority Validation

Code Removed

Implementation details removed for security.

Contact support for implementation guidance.

Troubleshooting

Issue: "DSCR below threshold"

Cause: Net operating income insufficient to service debt.

Solutions:

Reduce loan amount
Extend tenor to reduce monthly payment
Provide additional income sources
Co-borrower with additional income

Issue: "Collateral insufficient"

Cause: Provided collateral doesn't meet coverage ratio.

Solutions:

# Option 1: Add more collateral
collateral:
  - existing: â‚¦10M
  - additional: â‚¦3M
  - total: â‚¦13M (130% coverage) âœ…

# Option 2: Reduce loan amount
requestedAmount: 8000000  # 10M / 1.2 = 8.3M max

Issue: "Approval authority exceeded"

Cause: Loan amount requires higher approval level.

Solution: Route to appropriate authority:

â‚¦15M Loan â†’ Requires Regional Manager
Current Approver: Branch Manager â†’ ESCALATE

Migration from V1

V1 Business Loan Mapping

V1 Field/Table	V2 YAML Path
CollateralRequirements	`collateralConfig.*`
BusinessDocuments	`businessEligibilityConfig.requiredDocuments[]`
ApprovalLimits	`approvalWorkflow.levels[]`
SectorRestrictions	`businessEligibilityConfig.restrictedSectors[]`
TrancheDisbursement	`disbursementConfig.*`
MonitoringSchedule	`monitoringConfig.*`

Last Updated: January 2, 2026
API Version: V2 (BPMCore)
Product Category: Loan Products
Complexity: âââââ (Highly Complex)

Overview​

Key Features​

YAML Field Reference​

Basic Information Section​

Loan Tenure Section​

Principal Range Section​

Interest Configuration Section​

Collateral Configuration Section​

Business Eligibility Section​

Approval Workflow Section​

Disbursement Configuration Section​

Monitoring & Reporting Section​

Restructuring & Moratorium Section​

Complete Sample YAML Configuration​

Use Cases & Examples​

Example 1: Manufacturing SME Working Capital​

Example 2: Trading Business with Tranche Disbursement​

Example 3: Business with Moratorium Period​

DSCR Calculation Example​

Approval Workflow Example​

Collateral Verification Process​

Sector-Based Pricing​

Monitoring & Reporting Requirements​

Validation Rules​

Business Validation​

Approval Authority Validation​

Troubleshooting​

Issue: "DSCR below threshold"​

Issue: "Collateral insufficient"​

Issue: "Approval authority exceeded"​

Migration from V1​

V1 Business Loan Mapping​

Overview

Key Features

YAML Field Reference

Basic Information Section

Loan Tenure Section

Principal Range Section

Interest Configuration Section

Collateral Configuration Section

Business Eligibility Section

Approval Workflow Section

Disbursement Configuration Section

Monitoring & Reporting Section

Restructuring & Moratorium Section

Complete Sample YAML Configuration

Use Cases & Examples

Example 1: Manufacturing SME Working Capital

Example 2: Trading Business with Tranche Disbursement

Example 3: Business with Moratorium Period

DSCR Calculation Example

Approval Workflow Example

Collateral Verification Process

Sector-Based Pricing

Monitoring & Reporting Requirements

Validation Rules

Business Validation

Approval Authority Validation

Troubleshooting

Issue: "DSCR below threshold"

Issue: "Collateral insufficient"

Issue: "Approval authority exceeded"

Migration from V1

V1 Business Loan Mapping