Asset-based lending: preparing for the borrowing base review
An asset-based loan is sized on collateral: receivables, inventory, equipment and sometimes real estate. Lenders run a field exam and inventory appraisal, so the room must hold clean, reconcilable collateral data and the reports lenders use to set the borrowing base.
Folder index
- 01 Request summary Facility size, collateral types, use of proceeds.
- 02 Receivables Aging reports, customer list, credit memos, dilution history.
- 03 Inventory Inventory by location and category, perpetual records, count results.
- 04 Equipment and real estate Fixed asset register, appraisals.
- 05 Financials Financial statements, monthly results, forecast.
- 06 Cash management Bank accounts, lockbox setup, cash application process.
- 07 Field exam Examiner requests, sample files, responses.
How this raise works
ABL facilities come from banks, finance companies and private credit funds, and suit companies with significant working capital, including those with uneven earnings. The borrowing base is the eligible collateral times an advance rate, and availability moves with it month to month.
Lenders define eligibility tightly: receivables past a set age, from affiliates or foreign customers, or concentrated in one customer may be excluded; inventory may be valued at net orderly liquidation value from a third-party appraisal. A field examiner tests the receivables aging, inventory records, dilution and cash application.
After close, the borrower sends borrowing base certificates on a set schedule, often monthly or weekly, and cash usually runs through lender-controlled accounts. A room that keeps the reports organized also helps after closing.
Best data rooms for this raise
The 16 rooms re-ranked with this raise's weights. Raise workflow carries the most weight here.
- Investor tracking 17%
- Permission control 18%
- Raise workflow 26%
- Investor onboarding 17%
- Cost of a raise 21%
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Places 11 to 16: DealRoom (7.0), SmartRoom (6.8), ShareVault (6.7), Digify (6.2), Venue by DFIN (6.2), DocSend (6.0)
Folder index for the room
A starting index for this raise. Number the folders so the order survives exports and investors can cite them in questions.
- 01 Request summaryFacility size, collateral types, use of proceeds.
- 02 ReceivablesAging reports, customer list, credit memos, dilution history.
- 03 InventoryInventory by location and category, perpetual records, count results.
- 04 Equipment and real estateFixed asset register, appraisals.
- 05 FinancialsFinancial statements, monthly results, forecast.
- 06 Cash managementBank accounts, lockbox setup, cash application process.
- 07 Field examExaminer requests, sample files, responses.
- 08 LegalLien searches, organizational documents, landlord waivers.
- 09 Borrowing baseDraft certificate, eligibility calculations, reporting calendar.
Features this raise needs
| Feature | Why | Ellty | iDeals | SecureDocs | Datasite | Ansarada | Box |
|---|---|---|---|---|---|---|---|
| Q&A module | LPs and lead investors post questions on a file; the deal team routes each one, drafts a reply and decides who sees it. | ||||||
| Drag-and-drop folders | An entire numbered folder tree goes up in a single drop, structure intact. | ||||||
| Investor activity log | A per-investor record of opens, pages and minutes, which tells the IR team who is in diligence and who stalled. | ||||||
| API access | Lets a CRM or an internal script add investors, push files or pull the activity record. |
Setting up the room
- 01
Reconcile the ledgers
Tie the receivables aging and inventory records to the general ledger before the field exam.
- 02
Prepare for the examiner
Load samples, invoices and proof of delivery in bulk so the examiner can work remotely.
- 03
Collect landlord and warehouse waivers
Lenders need access to collateral at leased sites. Start these early.
- 04
Draft the borrowing base
Calculate eligible collateral using the lender's definitions to avoid surprises in availability.
- 05
Set up reporting
Keep a folder for ongoing borrowing base certificates after closing.
Common mistakes
- Receivables aging that does not tie to the ledger.
- Assuming all inventory is eligible.
- Leaving landlord waivers to the last week.
Calculators for this raise
Or take the four-question quiz and check the raise checklist.
Questions and answers
What is a borrowing base?
The amount available to borrow, calculated as eligible collateral multiplied by agreed advance rates, less reserves.
What does a field exam check?
Collateral records, receivables quality, dilution, inventory controls and cash handling.
Is ABL only for weak companies?
No. Many healthy companies with large working capital use ABL because it can offer more availability and fewer financial covenants.