Borrowing Base
/ˈbɒrəʊɪŋ beɪs/
Definitions
- (n.) The maximum amount a lender will advance to a borrower under a secured loan, calculated based on the value of specified assets.
The lender set the borrowing base at 80% of eligible accounts receivable.
Forms
- borrowing base
Related terms
See also
Commentary
The borrowing base is a dynamic figure that changes with the value of the borrower’s assets; precise definition and inclusion criteria are critical in loan documentation to avoid disputes.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.