Aloan turns a finished credit memo into a signed approval record, then carries the approved deal through closing to the day the loan funds. Your bank describes once who signs off on which loans. Each submission routes itself through that chain, collects the signatures in order, and keeps the package the signers saw. The conditions of approval live on the deal as records that are cleared, waived or carried forward as covenants. The closing checklist is built from the deal's own parties, facilities and collateral, and funding cannot be recorded until everything that has to be true before funding is. Run Aloan as your commercial LOS, or alongside the one you already have.
This is the part of a loan file examiners test. The FDIC's loan operations module asks how loans are approved, whether the approver had the authority, whether the loan was booked on the terms approved, and whether policy exceptions were approved and documented. A bank that answers those questions from email threads and a signature page scanned into a shared drive has a record, but a slow one to reconstruct. Aloan keeps the answer on the deal.
This page covers the approval chain, signing, conditions, the closing checklist, the booking sheet and the funding record. The work upstream of the memo is on the commercial loan underwriting platform page; the memo itself is on AI credit memo generation; what happens to covenants after funding is on covenant monitoring.
Lending authority
The approval chain
Under Settings, Approvals, an administrator sets up three things.
People and lending limits
Everyone who can be named in a sign-off or sit on a committee. Team members with an Aloan account sign in the app; anyone else is added by name and email and signs through an emailed link. Each person carries a total lending limit and an optional unsecured limit, each with a start date and an optional end date. Limits cannot overlap, a limit that has ended stays read-only, and every previous value is kept in the audit history with who changed it and why.
Committees
A loan committee or the board: a group that decides together. One recorder enters the committee's decision, cites the minutes, and the record identifies both the recorder and the committee. The members print on the memo's Credit Approval page beneath the committee's line.
The chain
The sign-offs a submission needs, in order. For each line: who signs (specific people, a deal-team role such as the relationship manager, anyone with a covering lending limit, or a committee); whether the line recommends or approves; when it applies (every submission, a loan amount band, or a special case such as an unsecured amount, a loan type or an open policy exception); whether it waits for the lines above it; how many signatures it needs; whether to check the signer's lending limit; and which sign-off stands in when no one can sign, for example the committee when the loan is above every officer's limit. A sign-off can require a different person from an earlier line, so an officer who underwrote the loan cannot be the only one to approve it.
Each credit event uses one chain: an origination, a loan review, a renewal. Submissions already open keep the chain they started with, so a policy change never rewrites an approval in flight.
Signatures
Submitting and signing
Submitting freezes the package. The memo, its saved analyses and the deal terms are captured as they stand; later edits do not reach the signers. The preview shows every stage the submission will pass through and who each line emails when its stage opens. A line with no eligible signer says why, and an administrator gets a link to the committee, sign-off or lending limit to fix. The deal moves to Pending Approval and the Approval tab opens: the request's status, how many signatures are in, who signed and what they decided, who is still to sign, and when each signer's email was sent or opened.
Three ways to sign. In the app, a signer reviews the frozen memo, chooses the decision, adds conditions for an approval with conditions, and types their full name on the signature line; the typed name is the electronic signature, drawn in script on the memo's Credit Approval page with a reference back to the Approval tab. By emailed link, a signer without an Aloan account opens the same memo beside the decision form, agrees to electronic records and signatures, and signs; the link is theirs alone and stops working once they respond. On paper, the frozen package downloads as a Word document with a signature line for every open sign-off; an administrator uploads the signed scan and ticks each signature on it, and the scan is stored once and never edited or removed.
Every outcome is recorded. A decline carries a reason, chosen by the deciding signer and printed beneath the signature. A reviewer can return the package for changes with a note; the submitter can recall it. An abstention or recusal completes a recommendation line and leaves an approval line for someone else. Once approved, the facilities, collateral, pledges and parties are locked. Changing approved terms means reopening the deal with a reason, editing, and submitting again; the earlier approval stays in the submission history with the package the signers saw.
Conditions
Conditions of approval
Aloan keeps the conditions of approval as records on the deal rather than as memo text, so a condition can be cleared, waived and turned into a covenant after the memo is frozen. Every deal that can be approved has a Requirements panel with three kinds of row.
| Kind | What it is | What happens to it |
|---|---|---|
| Condition | Something that must be true before the money moves: an executed lease, an equity injection, a payoff letter. | Cleared with a note and evidence (an upload, or a document already on the deal), or waived by someone with authority to decide deals, with a reason. The funding gate walks every one. |
| Covenant | Kept for the life of the loan: a minimum DSCR, a maximum leverage, a liquidity floor. Carries the metric, comparison and level the covenant monitor tests. | Becomes a covenant on the relationship when funding is recorded, active from booking, and is tested on its own calendar. |
| Reporting | Delivered on a schedule: annual statements, interim statements, a compliance certificate, a rent roll. Carries what is delivered, from whom and how often. | Becomes a reporting deliverable on the relationship at funding; the borrower is asked for it through the portal when each period ends. |
The standard options for your bank sit in the checklist and fill themselves in from the deal: the loan amount and advance rate, the pledged property's address, the borrower on the UCC line, the parties on the reporting rows. A row the deal does not need is unticked rather than deleted, so it prints nowhere and blocks nothing. The memo prints the conditions through read-only blocks that are never AI-written: before-funding conditions as a numbered list, covenants and reporting as a table of the requirement and its terms.
When a signer approves with conditions, their words are kept exactly as written and stamped with the approval. Sorting splits them into rows of each kind, so one sentence that asks for an executed lease and quarterly statements becomes a before-funding condition and a reporting requirement, with the original beside them. Until an approver's words are sorted or cleared, they block funding, because they could say anything.
Closing
The closing checklist
The Closing tab opens when the deal is approved: the checklist is built, the processor is named on the deal, and the relationship manager, underwriter and processor are emailed. A bank that orders title, flood or the appraisal before committee can start closing early from the status menu. The checklist is built from the deal's own records rather than a generic loan-type list, and each item says why it is there.
| Built from | Items | Supplied by |
|---|---|---|
| Every party | Sanctions screening; identity and due-diligence review for each individual; due diligence and beneficial ownership for each entity. | Bank |
| Each entity borrower or guarantor | Organizational documents by legal form, certificate of good standing, borrowing resolution or authority to guarantee, incumbency. | Borrower, through the portal |
| Each facility and guarantor | Executed promissory note, executed loan agreement, executed guaranty. | Bank, from the doc-prep system or counsel |
| Each pledged property | Title commitment, survey, property taxes current, flood determination, flood insurance and notices, appraisal or evaluation, environmental due diligence, property insurance, executed mortgage or deed of trust, settlement statement; recorded mortgage and final title policy after funding. Income property adds leases, estoppels, SNDAs and an assignment of rents. | Title company, appraiser, environmental firm, insurer, counsel; the borrower is never asked for these |
| Business assets pledged | UCC, tax lien and judgment searches; lien priority confirmed; executed security agreement; UCC-1 filing acknowledgment after funding; business property insurance; landlord waiver; lien noted on a vehicle title; deposit account control. | Bank and counsel |
| The purpose | Purchase: the agreement, equity injection and seller deliverables. Refinance: payoff letters, UCC terminations, mortgage releases. Construction: budget, contract, permits, builder's risk and the draw schedule. SBA: a review of the SBA closing package per facility. | Borrower, bank or vendor, item by item |
Items are grouped by when they are needed: before funding, after funding (trailing documents such as the recorded mortgage and the final title policy, which never hold up funding), and for reference. When the deal changes (a party added, a property pledged, the purpose edited) the list follows, and an item accepted under facts that have since changed reopens with a note to review the evidence again. Your bank can carry its own list instead.
Working an item. A document item takes an upload, or reuses a document already on the deal; it then waits for review, and accepting it records the reviewer's name and the date. A tick item is marked done with a note. An item can be sent back with what needs to change, marked not applicable with the reason, waived by someone who can decide deals, or reopened. A before-funding item can be linked to the condition it satisfies, so the condition and its supporting items read as one requirement: on the last supporting item, accepting and clearing the condition records both under one name against the condition's exact approved wording. Nothing clears a condition on its own. An approval correction records that something in the approval is wrong (a mistyped figure, a rate approved differently from how it was presented); processing continues and funding waits until it is confirmed.
Handoff
Booking sheet and funding
The booking sheet is the approved terms for loan operations to key from: the parties, each facility's structure and pricing, the collateral and what it is pledged to, the conditions of approval grouped by kind, and the signed approval record. It is rendered from the frozen approval, so later changes never reach it, and it downloads as a Word document. Where a facility carries an SBA or other guaranty, or a participation, the sheet carries both the commitment and the net bank exposure to the core.
Recording funding is where Aloan learns the bank moved the money. Enter the day it moved (today or earlier, never before the approval) and the loan books into the portfolio with that as its origination date; its covenants and reporting requirements become active from booking. The dialog lists what still stands in the way and refuses until it is clear: every before-funding condition cleared or waived, every approver's condition sorted or cleared, every before-funding item accepted, waived or marked not applicable, any open approval correction confirmed, and the approval still valid on that day. A chain can say how many days an approval stands; the Approval tab reads valid to fund until a date, the team is emailed once if it passes unfunded, and past it the deal is reopened for re-approval.
The relationship manager, underwriter and processor are emailed when a deal is approved, declined or funded. After funding, the trailing items stay open on the Closing tab until they arrive, and the relationship page shows the decision, the conditions marked cleared or waived, and the notes it approved.
What Aloan owns is the record between the memo and the funded loan: who was allowed to approve, what they approved, what the approval was subject to, what was delivered against each requirement, who accepted it, and what loan operations booked from. That is the record an examiner samples, and it is on the deal rather than in an inbox. Aloan can integrate with your existing stack through its REST API and webhooks.
Approval and closing: FAQ
How does loan approval work in Aloan?
Your bank describes once who signs off on which loans under Settings, Approvals: the people and committees that can sign, each officer's lending limit with its dates, and an approval chain that says which sign-offs a loan needs, in what order, and when a line applies (every loan, a loan amount band, or a special case such as an unsecured amount, a loan type or an open policy exception). Submitting a credit memo freezes the memo, its saved analyses and the deal terms, then routes the package through the chain. Each signer reviews the frozen memo, chooses approve, approve with conditions, decline, or abstain, and types their name as their electronic signature. A committee records one decision with a minutes reference. The result is a Credit Approval page on the memo with every signature, title and date, and a decline carries a reason.
Can a board member or loan committee member sign without an Aloan account?
Yes. Anyone your bank adds by name and email signs through an emailed link that is theirs alone. The link opens the submitted memo beside the decision form, exactly the document they can download from the same page. They agree to use electronic records and signatures, choose their decision, add conditions or a minutes reference where the line requires one, type their full name, and sign. The link stops working once they have responded or once the line is signed by someone else. A committee that still signs on paper downloads the frozen package as a Word document with its Credit Approval page, collects the signatures, and an administrator uploads the signed copy and ticks each signature on it. Uploaded copies are stored once and never edited or removed.
Does Aloan check lending authority at approval?
Yes, where the chain asks it to. Each person in the approval roster carries a total lending limit and an optional unsecured limit, each with a start date and an optional end date, and every change is kept in the audit history with who made it and why. A sign-off set to check lending limits only accepts a signer whose limit covers the loan. When no officer can sign, for example because the loan is above every limit or the only eligible officer recused, the chain names a fallback, such as the loan committee, and the line is sent there.
What is a condition of approval in Aloan?
A record on the deal, not a line of memo text. A condition is one of three kinds: a condition cleared or waived before funding, a covenant the borrower keeps for the life of the loan, or a reporting requirement delivered on a schedule. Each row has an assignee, a due date and an applies tick. The standard conditions fill themselves in from the deal, such as the loan amount, the pledged property's address and the borrower on the UCC line. Submitting the memo freezes the conditions with the package the signers read. When a signer approves with conditions, their words are kept exactly as written and sorted into rows of each kind, and the original stays beside them. A before-funding condition is cleared with a note and evidence, or waived by someone with authority to decide deals, with a reason.
What does the closing checklist cover?
It is built from the deal's own records: sanctions screening for every party, organizational documents and a good-standing certificate for each entity by legal form, a borrowing resolution, an executed note for each facility, the loan agreement, a guaranty for each guarantor, and for each pledged property the title commitment, survey, flood determination, appraisal or evaluation, environmental review, property insurance, the mortgage and the settlement statement. Business assets add lien searches, a security agreement and a UCC-1 filing. Purchase, refinance and construction deals add their own deliverables, such as payoff letters, mortgage releases, the budget, permits and a draw schedule. Each item says why it is on the list, who supplies it, and whether it is needed before funding, after funding or for reference. When the deal changes, the list follows.
What closing documentation does Aloan produce and record?
Aloan produces the approved package: the frozen credit memo with its signed Credit Approval page, the term sheet, and the booking sheet for loan operations to key from, each as a Word or PDF document rendered from the approval. It then records every executed closing document on the checklist: the processor uploads the executed note, loan agreement, guaranty, mortgage or security agreement, or reuses one already on file, a reviewer accepts it with their name and the date, and the record stays with the deal. The note, mortgage and guaranty themselves are drafted in the documentation system your bank already uses, from the approved terms on the booking sheet.
How does Aloan work with the title company, appraiser and other third parties?
The checklist names who supplies each item: the borrower, your team, or an outside party such as the title company, the appraiser, the environmental firm, the insurer or counsel. A borrower item is requested in the portal like any other document; an outside-party item is never asked of the borrower. When the third party delivers, the item takes the title commitment, the appraisal, the environmental report, the flood determination or the insurance certificate, records who reviewed it and when, and links it to the condition it satisfies. Items accepted under facts that later change reopen for review.
What is the booking sheet?
The approved terms, in one document, for loan operations to key into the core: the parties, each facility's structure and pricing, the collateral and what it is pledged to, the conditions of approval grouped by kind, and the signed approval record. It is rendered from the frozen approval, so later changes never reach it, and it downloads as a Word document. Booking into the core stays with the core; Aloan does not move money.
What stops a loan from funding before it should?
Recording funding refuses until every before-funding condition is cleared or waived, every approver's condition is sorted or cleared, every before-funding checklist item is accepted, waived or marked not applicable, any open approval correction is confirmed, and the approval is still valid on the funding date. A chain can say how many days an approval stands; past that date, the deal must be reopened and re-approved. Terms are locked while a request is out and once the deal is approved, so the approval is the record of exactly what was approved.
Related
AI credit memo generation. The memo the chain signs, with every figure cited to its source page. See AI credit memo generation.
Covenant monitoring. What happens to the covenants and reporting requirements once funding is recorded. See covenant monitoring.
Commercial loan origination software. The category overview and every step Aloan runs between the application and the funded loan. See commercial loan origination software.
Examiner readiness. How the approval record fits the exam. See examiner readiness for AI lending.