When determining the maturity of a loan, a lender must consider the borrower's ability to
repay, the use of loan proceeds and the useful life of assets being financed. When
considering these things, the maturity should be the shortest appropriate term. The
Maximum Maturity of a loan is based on Use of Proceeds.
Note:
- In TSoftPlus, the default Payment Frequency is Monthly, so when the “Loan Term (Years)” is first entered, the number of periods will be the result of the Loan Term multiplied by 12. When the user changes the Payment Frequency in the Loan Payments section, then the period will recalculate to reflect new frequency calculation.
- The Use of Proceeds section and Loan Term must be completed so the applicant's SBA loan payment can be computed.
- The Maximum Maturity on Revolving Lines of Credit (SBA Express and Patriot Express) is 7 years.
The Loan Term section (below) is part of the Loan Information screen, viewable when you
select LOAN INFORMATION from the submenu. The left side of the screen contains
the user input area while the right side displays the results.
The following table describes the features within the Loan Term section.
| Feature | Description |
|---|---|
| Heading section | To the immediate right of the Loan Term heading is the term in both years and periods (the example above shows 10 Years with 120 Periods) allowing the information to be visible if the sections are expanded or collapsed. |
| Loan Term (Years) | Enter the loan term in years |
| CALCLUATE WEIGHTED AVERAGE TERM |
This button allows you use the Weighted Average Term Calculation
to assist with figuring the Loan Term. Once Use of Proceeds have
been entered, those amounts will default over. There are certain
default term values automatically entered, but they can be
overwritten and the term will recalculate accordingly.
Note: If
the Weighted Average Term calculation is used to determine
the Loan Term (Years) and the amount of the loan or the
distribution of the Use of Proceeds changes, you must go
back into the Weighted Average Term area and click
APPLY to get the new term of the loan.
|
| Number of Periods | Displays the number of periods calculated from the loan term entered |