NetLoan - Servicer Entity Type Loan Overview
Overview
The Servicer entity type lets clients service loans on behalf of underlying owners — investors or other subsidiaries — by tracking ownership shares, recording funding contributed by owners, and passing borrower payments through to each owner per their share. A Servicer loan has a borrower as the Customer (no Lender vendor) and one or more NetLoan Investor Ownership records that allocate principal and interest across owners by type. This overview describes the end-to-end Servicer workflow and routes you to the step-by-step article for each operational task — setup, loan creation, ownership, funding, draws, and owner distribution.
Prerequisites
- The NetLoan bundle must include the Servicer entity type framework (released starting in bundle version 2025.1).
- Module Use in NetLoan Global Settings must include Servicer. Module Use is multi-select, so Servicer can run alongside Borrower, Lender, or Intercompany.
- A Loan Type configured for the Servicer entity type with the Servicer-specific items populated (Servicer Principal/Interest items, Funding Item, Subsidiary Owner Funding Principal Item, Sub Owner Principal/Interest items).
- Each individual workflow has its own prerequisites — see the linked step-by-step articles in the Use Cases section.
Processes
Configure Servicer functionality
One-time setup an administrator performs to make Servicer loans usable in the bundle. Covers enabling Servicer Module Use, configuring a Loan Type for Servicer loans, and creating the items used for borrower billing, owner funding, and distribution to owners.
NetLoan - Configure Global Settings and Loan Type for Servicer Loans
Create a Servicer loan
Standard loan creation when the loan is being serviced for one or more owners rather than serviced and owned by one subsidiary as lender. The procedure differs from a Lender loan in a few specific ways — Run Journals suppressed, additional bills need to be processed, Dynamic Installment schedule types unavailable.
NetLoan - Create a Servicer Loan
Establish or update loan ownership
Define which owners hold what share of principal and interest on the loan. Use cases vary meaningfully by ownership type — 3rd Party Owners are external vendors and produce a single set of transactions in the loan's subsidiary, while Subsidiary Owners are other subsidiaries in the same NetSuite OneWorld instance and produce intercompany pairs (one transaction per side). The Servicer Owner type is defined in the system but not yet supported — do not select it.
NetLoan - Set Up Ownership on a Servicer Loan
Record funding contributed by owners
Used when owners contribute cash to the loan independent of borrower activity — for example, loans where the lender funds 100% upfront while the borrower draws against it incrementally, or LOC structures where funds are received for a percentage of the available credit. Funding Requests can be created standalone or auto-created from a Draw Request.
NetLoan - Record Funding on a Servicer Loan
Process a borrower draw
Used when the borrower draws on available credit. The Draw Request record provides a request/approval step that precedes the actual draw modification, so the request and the modification can be performed by users with different permission sets, and so integrations can push draws cleanly. Optionally creates the matching Funding Request automatically.
[Article coming soon]
Distribute borrower payments to owners
After a borrower payment is applied, the Owner Distribution Bill process passes the principal and interest portions out to each owner per their share. The output differs by ownership type — vendor bill in the loan's subsidiary for 3rd Party Owners, an intercompany invoice/bill pair for Subsidiary Owners. Distribution is a separate manual step from standard borrower billing.
NetLoan - Distribute Payments to Owners on a Servicer Loan
Considerations
- The Servicer Ownership type is defined in NetLoan but not yet supported. Use 3rd Party Owner or Subsidiary Owner. The Servicer entity type itself (on the loan) is fully supported — only the Servicer ownership type is deferred.
- Servicing fee / custom-splitting fee functionality is not yet available. The Service Fee % and Service Fee Amount fields are visible on Servicer loans, but the underlying calculations and splits will be covered in a separate article when that work releases.
- Schedule type: Servicer loans cannot use Dynamic Installment schedule types. Use Fixed Installment, Revolving, or another supported schedule type.
- GL posting: Servicer loans do not post journals via Run Journals — the Run Journals button is suppressed in view mode, and posting is driven by the bills and invoices generated through billing, funding, and distribution.
- Loan locking: Servicer loans have no initial-balance journal, so the loan record is locked the first time a bill is posted rather than at commencement.
- 3rd Party vs. Subsidiary Owner — financial impact: 3rd Party Owners produce a single transaction in the loan's subsidiary (a vendor bill on distribution, an invoice on funding). Subsidiary Owners are other subsidiaries in the same NetSuite OneWorld instance, so they always produce an intercompany pair (one transaction in each subsidiary, linked via the Paired Intercompany Transaction field).