medium · Debt Capital Markets secondary-trading-liquidity
What is a 'Borrowing Base' as it relates to certain types of Revolving Credit Facilities?
- The minimum interest rate, or floor, that the lending bank is willing to accept on the revolving loan facility.
- The total amount of cash equity that the financial sponsor must commit to and invest in the deal at closing.
- The physical location of the lead bank's corporate headquarters where the loan documents are formally signed and executed.
- A limit on borrowing capacity based on the value of specific current assets like accounts receivable and inventory.
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