medium · Private Credit loan-structures-instruments
An Asset-Based Lending (ABL) facility uses a borrowing base with an 85% advance rate on eligible Accounts Receivable and a 60% advance rate on eligible Inventory. A company has $40,000,000 in total AR ($5,000,000 is >90 days old) and $20,000,000 in total Inventory ($2,000,000 is work-in-progress).
What is the maximum availability under the borrowing base?
- $40,550,000
- $46,000,000
- $34,450,000
- $51,000,000
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