RECEIVABLES FINANCE GLOSSARY

Borrowing availability

DEFINITION

Borrowing availability is the amount a borrower can actually draw under a facility at a point in time. It is the lesser of the net borrowing base and the facility commitment, minus loans already outstanding and any letters of credit issued under the facility. It moves whenever collateral, reserves, or outstandings change.

Applies to:Asset-based lendingTrade receivables securitizationFactoringReceivables purchase agreements

Availability is not the borrowing base

The two get used interchangeably in conversation and they are not the same number. The borrowing base is what the collateral supports: eligible receivables times the advance rate, less reserves. Availability is what you can draw right now, which also depends on the size of the commitment and on what you have already used. A borrower can have a $32 million borrowing base and only $6 million of availability.

The distinction matters because the two numbers move for different reasons. The borrowing base moves with collateral quality: aging, concentration, dilution, reserves. Availability also moves with borrowing activity and letter of credit issuance, which the treasury team controls directly.

The full walk, with numbers

FROM ELIGIBLE RECEIVABLES TO BORROWING AVAILABILITY
Line	Amount
Eligible receivables	$41,000,000
Advance rate	85%
Gross borrowing base	$34,850,000
Less: reserves (dilution, disputes, rent)	($2,850,000)
Net borrowing base	$32,000,000
Facility commitment	$30,000,000
Lesser of net borrowing base and commitment	$30,000,000
Less: revolver loans outstanding	($21,500,000)
Less: letters of credit outstanding	($2,400,000)
Borrowing availability	$6,100,000

Note the cap at work: the collateral supports $32 million but the commitment is $30 million, so $2 million of borrowing base is doing nothing. In the reverse case, where the borrowing base falls below the commitment, the base becomes the binding constraint, and if it falls below outstandings the borrower is overadvanced and most agreements require an immediate paydown.

Why availability deserves daily attention

Covenant springs: many agreements switch on a fixed charge coverage covenant or move to weekly reporting when availability falls below a threshold, commonly 10 to 15 percent of the commitment.
Cash dominion: some facilities sweep the borrower's collections to the loan balance when availability drops below a trigger, which changes how cash is managed day to day.
Timing gaps: availability is calculated from the most recent certificate, so a base that has quietly fallen since the last report can turn a routine draw request into a difficult conversation.
Letters of credit: issuing a $2 million LC reduces availability the same day, even though no cash moved.

Olycor computes availability from the same deterministic walk that builds the certificate: eligible collateral, advance rate, reserves, commitment, outstandings, and letters of credit, each figure traceable to its source. When availability moves, you can see whether collateral or borrowing activity moved it, before your lender asks.

Frequently asked questions

What is the difference between availability and excess availability?+

In most agreements they describe the same idea, the undrawn amount the borrower can access, but excess availability is often a defined term with specific adjustments, for example subtracting past due payables or reserves the agent has imposed. Covenant triggers usually key off the defined term, so use the agreement's definition when testing thresholds.

Can availability be negative?+

Effectively yes. If outstandings exceed the lesser of the net borrowing base and the commitment, the facility is overadvanced. Most agreements require the borrower to repay the overadvance immediately or within a short cure period, and repeated overadvances invite tighter reporting or reserves.

How often is availability recalculated?+

It changes continuously with borrowings and repayments, but the collateral side updates only when a new certificate is delivered, monthly or weekly in most asset-based facilities and daily in some. That lag is why borrowers who can recompute their base from live data hold an advantage: they see the real number between reporting dates.

Know your real availability between certificates.

Olycor recomputes the full walk from eligible collateral to availability whenever data lands, so draw decisions run on current numbers, not last month's.

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