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.

Eligible Receivables

Receivables that satisfy contractual eligibility criteria and can be included in the borrowing base. Ineligible receivables (delinquent, government obligors, concentrated, cross-border) are excluded.

Dilution

The reduction in accounts receivable balances through credits, returns, disputes, and volume discounts — rather than through cash payment. Dilution reserve is an advance rate deduction: if trailing 12-month dilution is 8%, lenders may subtract 8% from the AR advance rate.