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Borrowing Base Frequently Asked Questions Q: How do I fill this out? A: Gather your latest accounts receivable aging report and most recent financial statements. Locate the outstanding accounts receivable,.

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A borrowing base is the amount of money that a lender is willing to loan a company, based on the value of the collateral the company pledges.

The amount that can be borrowed is based on the advance rate set by the lender. The advance rate is the maximum percentage of the current borrowing base that the lender can make available to the borrower as a loan (see Exhibit 1 for an example).

Borrowing base facilities are working capital credit facilities which are secured in full by current assets (usually trading receivables, inventory (ie goods in storage or in transit), cash and contractual rights) of the borrower and/or other security providers.

Reserve-Based Lending (RBL) is a type of financing for independent exploration and production companies. RBL is a “borrowing-base” type of loan sized on the basis of the projected Net Present Value (NPV) of cash flows generated by the underlying oil & gas assets.

For example, your lender might count the $50,000 you are owed as $30,000 in collateral, and let you borrow up to $80,000. In that case, your borrowing base calculation would be $50,000 (your cash in the bank) plus $30,000 (the “eligible” collateral amount, as deemed by the lender, of the money you are owed).

What is a Borrowing Base? The borrowing base is the total amount of collateral against which a lender will lend funds to a business. It presents a maximum cap on how much asset-based debt a business can obtain. This typically involves multiplying a discount factor by each type of asset used as collateral.

A borrowing base is an important tool for lenders as it allows them to assess the amount of money borrowed against collateral. You calculate this figure by taking the value of eligible collateral and subtracting any outstanding loans. Creditors have to be careful when it comes to giving out loans.

Borrowing base is an accounting metric used by financial institutions to estimate the available collateral on a borrower's assets in order to evaluate the size of the credit that may be extended.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
Industries
Forms in Spanish
Localized Forms
State-specific Forms
Forms Kit
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232