medium · Private Credit loan-structures-instruments
An Asset-Backed Lender (ABL) establishes a borrowing base for a manufacturer with $30m in Accounts Receivable (AR) and $20m in Inventory. The AR includes $5m that is over 90 days past due. The Inventory includes $3m in obsolete raw materials.
If the advance rates are 85% for eligible AR and 50% for eligible Inventory, what is the maximum drawdown available?
- 35.50m
- 25.50m
- 32.25m
- 29.75m
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