Construct a borrowing base formula from eligible receivables, inventory and equipment values.
Finance & Banking
Asset-Based Lending Against Receivables, Inventory and Equipment
Learn to structure asset-based lending facilities secured against receivables, inventory and equipment, including borrowing base mechanics, field examinations and collateral monitoring.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
When a borrower's cash flow is thin, seasonal or hard to underwrite, lenders turn to asset-based lending, which sizes credit availability to the liquidation value of specific collateral rather than projected earnings. This course builds that discipline step by step. Participants construct a borrowing base from eligible accounts receivable, inventory and equipment, apply advance rates that reflect dilution, aging and appraisal value, and design the eligibility criteria that exclude concentrated, disputed or stale collateral. Sessions cover field examination procedures used to verify collateral reported on a borrowing base certificate, inventory appraisal methods for raw materials, work in progress and finished goods, and equipment valuation using orderly liquidation value. Structuring topics include revolving facility mechanics, cash dominion and lockbox controls, and the covenants and reporting cadence that keep a lender's collateral position current between examinations. Case exercises use real borrowing base certificates and field exam reports so participants see how a facility actually performs when a borrower's business slows. Participants leave able to structure, monitor and work out an asset-based facility with collateral-based discipline.
Expected Learning Outcomes
Apply advance rates and eligibility exclusions that account for dilution, concentration and collateral quality.
Plan and interpret a field examination that verifies collateral reported on a borrowing base certificate.
Value inventory collateral, distinguishing raw materials, work in progress and finished goods.
Value equipment collateral using orderly liquidation value from third-party appraisals.
Design cash dominion, lockbox and reporting controls that keep collateral monitoring current.
Identify early warning signals in borrowing base trends that call for tightened monitoring or facility action.
Who Should Attend
Commercial and asset-based lending relationship managers structuring secured facilities.
Credit analysts underwriting borrowing base facilities against working capital collateral.
Field examination and collateral monitoring specialists reviewing borrower reporting.
Corporate treasurers and CFOs negotiating asset-based facilities for their businesses.
Turnaround and restructuring advisors working with asset-based lending in distressed situations.
Risk and portfolio management staff overseeing asset-based lending exposure.
Course Modules
Select any module to see its sessions and points.
01Asset-Based Lending Fundamentals and Borrowing Base Design
2 sessions · 8 points
Session 1Structuring the Borrowing Base Formula
- Build a borrowing base formula combining advance rates on eligible receivables, inventory and equipment.
- Set eligibility criteria that exclude concentrated, cross-aged or disputed receivables from the borrowing base.
- Calculate dilution from returns, discounts and credit memos and adjust the borrowing base accordingly.
- Compare seasonal borrowing base swings against a facility's committed and uncommitted capacity.
Session 2Advance Rates, Reserves and Facility Sizing
- Set advance rates on receivables and inventory that reflect historical collection and liquidation experience.
- Apply reserves, such as rent and landlord lien reserves, that reduce net available borrowing base.
- Size a revolving facility limit against projected peak borrowing base availability across the year.
- Test facility headroom against a borrower's seasonal working capital cycle before closing.
02Collateral Valuation and Field Examination
2 sessions · 8 points
Session 1Inventory and Equipment Valuation
- Distinguish valuation approaches for raw materials, work in progress and finished goods inventory.
- Apply orderly liquidation value from a third-party appraisal when setting equipment advance rates.
- Assess inventory turnover and obsolescence risk before including a category as eligible collateral.
- Reconcile appraised collateral values against the borrower's perpetual inventory records.
Session 2Planning and Interpreting Field Examinations
- Plan a field examination scope covering accounts receivable aging, inventory counts and control testing.
- Test receivables for existence and collectability by tracing sample invoices to shipping documentation.
- Identify red flags during a field exam, such as related-party receivables or phantom inventory.
- Translate field exam findings into borrowing base adjustments and covenant recommendations.
03Facility Structuring and Collateral Controls
2 sessions · 8 points
Session 1Revolving Facility Mechanics and Cash Dominion
- Structure revolving facility drawdown and repayment mechanics tied to daily borrowing base availability.
- Design lockbox and cash dominion arrangements that give the lender control over collateral proceeds.
- Set springing dominion triggers that activate cash control only when availability falls below a threshold.
- Draft borrowing base certificate reporting requirements and the frequency of borrower certification.
Session 2Covenants, Monitoring and Portfolio Oversight
- Set minimum availability and fixed charge coverage covenants appropriate to an asset-based facility.
- Design a collateral monitoring calendar combining borrowing base certificates and periodic field exams.
- Identify early warning indicators, such as declining availability trends, that call for closer monitoring.
- Plan lender actions, including reserve increases or facility restructuring, when collateral quality deteriorates.
04Risk Management and Workout Scenarios
2 sessions · 8 points
Session 1Portfolio Risk and Concentration Management
- Assess portfolio-level concentration risk across borrowers, industries and collateral types in an ABL book.
- Stress test borrowing base availability against a downturn in receivables collection or inventory value.
- Evaluate cross-border collateral issues when receivables or inventory sit in multiple jurisdictions.
- Review intercreditor arrangements when asset-based lending sits alongside term debt or mezzanine financing.
Session 2Distressed Situations and Facility Workout
- Identify triggers for a special assets or workout referral within an asset-based lending relationship.
- Assess liquidation scenarios and expected recovery on receivables, inventory and equipment collateral.
- Negotiate forbearance terms and tightened reporting during a borrower's financial distress.
- Coordinate collateral liquidation with an appointed agent while preserving lender priority and control.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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