How to Structure a Borrowing Base of Credit (Part II of II)

The first part of this two-part series covered borrowing base (BB) lending parameters, accounts receivable and inventory financing (ARIF), and the conditions required for BB lending. It identified borrowers best suited for BB lending, and showed how to calculate BB, determine advance rates for accounts receivable (A/R) and inventory, and categorize ineligible A/R and inventory.

This second part describes the typical ineligible A/R, calculations for the BB from the account…