Borrowing Base & Advance Rate Calculator
Calculate availability on a receivables line. Enter gross AR, ineligibles, the advance rate, and the current outstanding balance to see eligible collateral and remaining availability.
How the borrowing base is calculated
A receivables borrowing base starts with gross AR, subtracts ineligible receivables to get the eligible pool, then applies the advance rate. The difference between the eligible pool and the availability is the lender cushion. Borrowers report this on a borrowing base certificate.
Payment matching keeps receivables records current for your portfolio reports and asset-based lending workflow.
Frequently asked questions
What is a borrowing base?
A borrowing base is the amount a lender will lend against a borrower's collateral at a point in time. For a receivables line, it starts with gross accounts receivable, subtracts ineligible receivables, and applies the advance rate to the eligible pool. The result is the availability the borrower can draw, less anything already outstanding.
How is the advance rate applied?
The advance rate is applied after ineligibles are removed, not to the gross ledger. You start with gross AR, subtract ineligible receivables and any concentration excess to get the eligible pool, then multiply the eligible pool by the advance rate. The difference between the eligible pool and the availability is the lender's cushion.
What counts as an ineligible receivable?
Common ineligibles include invoices aged past their eligibility window, cross-aged accounts, foreign or affiliate balances, contra accounts, and amounts above a debtor concentration limit. They are excluded from the borrowing base because they carry higher collection or dilution risk.
How do lenders keep the borrowing base current?
The borrowing base moves every time receivables and cash do, but many lenders only recompute it when a borrowing base certificate is submitted. Continuous reconciliation and monitoring keep eligibility, aging, and dilution current, so availability reflects real collateral rather than a stale snapshot.
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