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.

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%.

Borrowing Base Certificate (BBC)

A periodic certification (typically monthly) by the borrower confirming the composition and value of the collateral pool. The BBC is the primary operational control document; lenders may field audit the BBC quarterly.

Concentration Limit

A cap on the proportion of the borrowing base attributable to a single obligor, industry sector, or asset type. Prevents a single default from causing a disproportionate availability reduction; typically 10–25% per obligor.