An advancement is a transaction that increases a loan’s principal balance to give a borrower early access to a portion of their total authorized loan amount. This is typically done by extending additional funds from a pre-approved credit limit.

In this article, we'll explain how to configure, log, edit, fund, and delete advancements within LoanPro’s LMS.

Advancement categories and APR calculations

It is best practice to configure advancement categories before logging an advancement. These help organize different types of advancements in the LMS and determine if associated advancements—completed and scheduled—should be included in APR calculations.

You can create and edit categories in Settings > Loan > Labeling > Advancement Categories. If you want a category to be included in APR calculations, enable the “Include In APR” toggle. This feature allows you to provide borrowers with accurate Truth In Lending Act (TILA) numbers, even if an advancement has not been issued yet.

Note: To update an APR calculation after adding an advancement to a loan, the account must be inactivated. Activated loan accounts do not automatically recalculate the APR when an advancement is added.

Log an advancement

Before you can log an advancement on an account, the account must be activated. Once activated, navigate to Account Setup > Setup Tools > Advance/Credit > Advancements. You can then manage existing advancements on an account and add a new one. To log a new advancement, click Add and then enter the following information:

• Title: A unique name to distinguish this advancement from others on the account.
• Application Date: The date that the advancement applies to the loan. Interest begins accruing on the principal starting on this date.
• Amount: The total dollar value of the advancement.
• Category: The classification used to group and track this advancement in loan reporting.

Once you have entered the necessary information, click Save. Next to each advancement, you will see a few options:

• Edit: Change the information you entered when creating the advancement.
• Delete: Remove the advancement from the account.

Fund an advancement

You can fund an advancement at any time from the Enhanced Funding page. Within an individual loan account, follow these steps:

1. Navigate to Account Setup > Setup Tools > Enhanced Funding.

2. Select the “New Fund” dropdown menu located beneath the funding summary section.

3. Choose the recipient of the funds: Customer or Source Company.

• Note: To select a recipient, the corresponding Customer or Source Company must already be associated with the loan.

4. Fill out all required fields in the Transactions tab.

5. Confirm that the transaction details are correct, then click Finish.