> For the complete documentation index, see [llms.txt](https://docs.arenas.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.arenas.fi/atomica/financing-request-lifecycle.md).

# Financing Request Lifecycle

A financing is not a single transaction — it moves through a **state machine**, and each transition is performed by a different role. The step most people miss is that **approval and draw-down are separate**: an approver authorises an amount, and the borrower later draws it down themselves.

***

### The states

```mermaid
stateDiagram-v2
    [*] --> REQUESTED: borrower creates request
    REQUESTED --> REQUESTED: modifyRequest
    REQUESTED --> APPROVED: approver authorises (full or partial)
    REQUESTED --> CLOSED: closeRequest / declined
    APPROVED --> ACTIVE: borrower draws down (receive)
    APPROVED --> CLOSED: closeRequest
    ACTIVE --> Repaid: repay principal + interest
    Repaid --> [*]
```

| State         | Meaning                                                                              | Who moves it next      |
| ------------- | ------------------------------------------------------------------------------------ | ---------------------- |
| **REQUESTED** | Request created, awaiting review. Can still be edited or cancelled.                  | Approver (or borrower) |
| **APPROVED**  | An amount is authorised and a **timed receive window** is open. No funds have moved. | Borrower               |
| **ACTIVE**    | Financing drawn down; obligations accrue until repaid.                               | Borrower (repay)       |
| **CLOSED**    | Request cancelled or declined before draw-down.                                      | —                      |

***

### Step 1 — Request

The borrower creates a request against a market, choosing:

* **Amount** and **minimum amount** — the acceptable fill band `[minAmount, amount]`.
* **Type** — interest-accrual (with a **rate ceiling**) or fixed-repayment (a **fixed repay amount** over a **duration**).
* **Recipient** — where funds should land (defaults to the access-token owner).

No token approval is needed; eligibility is the **access token (NFT)**. While in `REQUESTED`, the borrower may `modifyRequest` or `closeRequest`.

***

### Step 2 — Review (approve ≠ fund)

An **Approver** reviews the request and either:

* **Approves** it — optionally for a **partial** amount within the requested band — which **opens a receive window** (an earliest and latest time to draw down), or
* **Declines** it.

> **Approval moves no money.** It authorises an amount and starts a clock. This is the key difference from collateral-based lending, where borrowing is instantaneous.

The receive window is **snapshotted at approval** and does not change even if the market is reconfigured later.

***

### Step 3 — Draw down (receive)

Inside the receive window, the **borrower** draws the money down. Liquidity is sourced from the pool’s **lender intents**, selected automatically **cheapest-rate-first** — the borrower does not hand-pick lenders in the standard flow. See [Intents & Liquidity](/atomica/intents-and-liquidity.md).

A draw-down can **partially fill** if pool capacity is short, and the borrower can draw again (up to the approved amount) while the window is open. Because on-chain capacity can change between approval and draw-down, a fill is only final once the transaction settles. Possible outcomes:

| Outcome              | Meaning                                                             |
| -------------------- | ------------------------------------------------------------------- |
| **Success**          | Financing becomes `ACTIVE`.                                         |
| **Lack of capacity** | Not enough lender liquidity available right now.                    |
| **Rate exceeded**    | The only available liquidity is priced above the request’s ceiling. |
| **Below minimum**    | The achievable fill is under the request’s `minAmount`.             |

***

### Step 4 — Repay

Once `ACTIVE`, **anyone** (not only the borrower) can repay — in full or in part — at any time. Repayment is enforced by the **off-chain agreement**, not by an on-chain health factor, so there is no price-based liquidation. See [Repay](/atomica/financing-markets/repay.md).

If a loan is not repaid, the obligation can be **sold on a secondary market** at a discount, with proceeds refunded to the affected pool’s LPs.