Glossary

AR Securitization Glossary

Essential terms and definitions for accounts receivable securitization, asset-backed lending, and structured receivables finance.

A B C D F I O S U

A

Advance Rate

The percentage of eligible receivables that a lender will fund, typically 80-90% for investment-grade obligor pools.

Read full definition →

B

Borrowing Base

The maximum drawable amount under an AR facility, calculated as eligible receivables times the advance rate, minus reserves.

Read full definition →

Borrowing Base Certificate (BBC)

A periodic compliance report submitted to the lender that documents the current borrowing base calculation and facility availability.

Read full definition →

C

Concentration Risk

The risk arising from excessive exposure to a single obligor or group of related obligors within the receivables portfolio.

Read full definition →

Cross-Aging

An eligibility rule that makes all of an obligor's receivables ineligible when a threshold percentage of their invoices are past due.

Read full definition →

D

Days Past Due (DPD)

The number of days an invoice has remained unpaid beyond its original due date, the primary metric for aging classification.

Read full definition →

Dilution

Non-cash reductions to accounts receivable caused by credit memos, returns, disputes, rebates, and other adjustments.

Read full definition →

F

Facility Agreement

The master legal contract governing an AR securitization or lending facility, including limits, advance rates, covenants, and reporting requirements.

Read full definition →

I

Ineligible Receivables

Receivables excluded from the borrowing base due to cross-aging, intercompany status, foreign obligors, concentration breaches, or other criteria.

Read full definition →

O

Obligor Limit

The maximum allowable AR exposure to a single customer or group of related entities, typically expressed as a percentage of the eligible pool.

Read full definition →

S

Securitization (AR)

A structured finance technique in which trade receivables are pooled and sold to an SPV, which issues securities backed by their cash flows.

Read full definition →

U

Unapplied Cash

Payments received from obligors that have not yet been matched and applied to specific open invoices in the accounts receivable ledger.

Read full definition →

Terms Defined

Letter Groups

In-Depth Articles

See These Concepts in Action

Olycor automates every concept in this glossary, from eligibility testing and advance rate calculations to concentration monitoring and BBC generation.

Get Started Free