Overview
The Eligibility of Sources and Uses feature in CLA+ provides lenders with precise control over how funds are allocated to budgeted line items, ensuring funding rules are followed throughout the lifecycle of a deal. This is essential when managing complex capital stacks with diverse funding sources that have specific restrictions, such as NY/HUD and SBA loan or tax credits. The feature reduces regulatory risk, prevents draw errors, and supports full auditability from deal setup to each draw.
Setting Eligibility Rules for Sources and Uses
Description
Lenders can define which funding sources are eligible to fund specific cost line items directly within the Sources and Uses Eligibility tab. This configuration ensures that each dollar is allocated in line with funding requirements, reducing the chance of misallocated funds.
Step-by-Step Instructions:
Step 1: Navigate to the Sources and Uses Eligibility tab.
This is where eligibility rules are configured for each budget line item.
Step 2: Click “Setup” to define eligibility.
This opens a grid where each row represents a line item and each column represents a funding source.
Step 3: Assign Eligibility Rules.
Mark sources as eligible or ineligible for each line item. It is recommended to mark all ineligible at the top right corner and then mark any line item as eligible individually. You can:
Set rules at the group or individual line level.
Specify discrete allocation amounts.
Review the “Remaining to Allocate” column to verify proper coverage.
Step 4: Review and Confirm Validation.
Real-time validation flags overfunded or over-allocated line items.
Step 5: Finalize Eligibility Rules.
Once saved, eligibility rules are locked in. Any future changes require a budget modification or draw, ensuring traceability.
Note
Use eligibility configuration to establish compliance early in the deal and reduce errors during draw requests
Applying Eligibility Rules in the Draw Process
Description
During draw submissions, the eligibility rules established earlier automatically control how funds are allocated. This streamlines the review process and ensures funding aligns with predefined rules.
Step-by-Step Instructions:
Step 1: Initiate a Draw.
Open the draw schedule, which reflects finalized eligibility for each line item.
Step 2: Enter Current Amounts.
Under each cost item, input draw amounts in the “Current Amount” field.
Step 3: Customize Your View.
Use the columns panel and saved views to adjust the draw layout for easier tracking.
Step 4: Click “Auto Balance.”
The system will automatically apply eligibility and tranche rules to distribute funds across eligible sources.
Step 5: Manual Adjustments (if needed).
Reviewers can manually adjust values, but only within the constraints of the eligibility setup.
Step 6: Review Line Item Funding Details.
For each line item:
“Original Amount”: Total budgeted value.
“Current Amount”: Current requested draw.
“Funding Amount”: Value currently being drawn from each source.
“Remaining to Fund”: Outstanding funding needed for each source.
Step 7: Export the View (Optional).
Export eligibility allocations as an Excel file from the draw package. This is useful for sharing or documentation.
Note
The system prioritizes funding by verifying eligibility first, then applying the order of funding tranches.