Every receivables-backed facility applies a stack of eligibility tests and adjustments before a single dollar becomes available. This library explains each rule with the data it needs, a worked example, and what it does to your borrowing base.
How the aging cutoff works in receivables-backed facilities: 90 days from invoice date or 60 from due date, a worked example, and where the data breaks.
How the contra exclusion works: AP owed to a counterparty is netted against AR from the same counterparty, with a worked example and the AP data problem.
How dilution works: the ratio of credit memos and adjustments to sales, how it drives a dilution reserve, and a worked example with real numbers.
How cross-aging works: when 25 or 50 percent of a customer's balance goes past due, the entire balance becomes ineligible. Worked example with real numbers.
How customer concentration limits work in ABL, factoring, and securitization: the calculation, a worked example, and the availability impact.
How the disputed invoice exclusion works: disputed amount versus whole invoice treatment, a worked example, and where dispute data hides in the ERP.
How foreign obligor and currency rules work: exclusions, insured carve outs, FX conversion, and a worked example with a capped foreign basket.
Why government receivables are often excluded from the borrowing base, how the Assignment of Claims Act fits in, and a worked example across obligor levels.
Why receivables owed by affiliates are excluded from the borrowing base, how the test works with real numbers, and how affiliates hide in the customer master.
Why unapplied cash gets deducted from the borrowing base, how it inflates AR aging, and a worked example showing the availability impact.
The glossary defines the building blocks these rules operate on, from eligible receivables to reserves and servicer reports.
Browse the glossary →