Borrowing Base

The maximum loan amount a borrower may draw under a revolving credit facility, calculated as the sum of eligible collateral values multiplied by applicable advance rates. Distinct from a fixed loan: availability fluctuates as collateral values change; monthly BBC certification is standard.

Advance Rate

The percentage of eligible collateral value that lenders will fund against; reflects the expected recovery rate in a stress liquidation scenario. Accounts receivable: 70–85%; inventory: 40–65%; equipment: 60–75%; real property: 50–65%.

Cash Dominion

A mechanism where all collection account receipts are swept daily to pay down the outstanding revolving balance. Hard (full) cash dominion applies from day one; springing cash dominion activates when excess availability falls below a threshold (typically 10–25% of facility size).