Construction and Land Development Loans Construction and land development loans include construction and land development loans outstanding and unfunded commitments to fund construction and land development loans, whether irrevocable or unconditionally cancellable. And, third, more aged receivables were created because certain customers consistently paid at more than 90 days. Eligible Account Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the debt obligations of such holding company) have the highest short-term ratings of each Rating Agency at the time any amounts are held on deposit therein, or (ii) an account or accounts in a depository institution or trust company in which such accounts are insured by the FDIC or the SAIF (to the limits established by the FDIC or the SAIF, as applicable) and the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating Agency, the Certificateholders have a claim with respect to the funds in such account or a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution or trust company in which such account is maintained, or (iii) a trust account or accounts maintained with (a) the trust department of a federal or state chartered depository institution or (b) a trust company, acting in its fiduciary capacity or (iv) any other account acceptable to each Rating Agency. Asset-based lenders rely on two metrics to estimate the A/R liquidation value, namely ineligibles and dilution. 1. U~ _rels/.rels ( MK1!;*"^DMdC2(.3y3C+4xW(AyXJBWpb#InJ*Eb=[JM%a B,o0f@=a noA;Nv"ebR1REF7ZnhYjy#1'7 9m.3Y PK ! Actual advance rates subject to appraisal or field exam results. D) Inter-company receivables - The accounts receivable ineligible inter-company receivables. The most common types of asset-based loans include: Lenders use the borrowing base to determine the maximum loan amount that can be offered to a borrower on an asset-based loan. FinSoft Purchased Receivables means all those accounts, receivables, chattel paper, instruments, contract rights, documents, general intangibles, letters of credit, drafts, bankers acceptances, and rights to payment, and all proceeds thereof (all of the foregoing being referred to as "receivables"), arising out of the invoices and other agreements identified on or delivered with any Invoice Transmittal delivered by Seller to Buyer which Buyer elects to purchase and for which Buyer makes an Advance. B) LIFO - The inventory ineligible last-in-first-out (LIFO) amount. Discover the latest numbers, news and market moves to know about each week with Ginger Chambless, Commercial Bankings Head of Research. In determining the amount to be so included, the face amount of a Credit Card Receivable shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Borrower may be obligated to rebate to a customer, a Credit Card Issuer or Credit Card Processor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Credit Card Receivable but not yet applied by the Loan Parties to reduce the amount of such Credit Card Receivable. This stand-alone program can be run on any PC or Windows-based network.Asset Based B) Other - The equipment ineligible B amount. View Infographic Version. View the Text Version While a loan might be to a company that makes accessories, the existence of some accessories may be reason to make them ineligible. Eligible Unbilled Accounts means Accounts that otherwise qualify as Eligible Accounts except that an invoice, statement or other billing document has not been sent to the applicable Account Debtor; provided, that (a) in the case of Accounts comprised of incentive bonuses with respect to which CareFirst is the Account Debtor, any such Account shall cease to be an Eligible Unbilled Account (i) on the date that an invoice, statement or other billing document with respect to such Account is sent, (ii) if such Account is due more than one year after the relevant award date, or (iii) to the extent that the aggregate amount of all such Accounts with respect to which CareFirst is the Account Debtor exceeds $3,500,000, and (b) in the case of any other Accounts, (i) on the date that an invoice, statement or other billing document with respect to such Account is sent to the applicable Account Debtor, or (ii) on the date that is 60 days after the most recent date on which services, goods or merchandise were provided by a Borrower. Eligible Trade Receivables means Accounts created by any Borrower arising out of the sale of finished goods Inventory other than to retail customers deemed by the Administrative Agent in its discretion to be eligible for inclusion in the calculation of the Borrowing Base arising from the sale of the Borrowers Inventory (other than those consisting of Credit Card Receivables, Customer and Marketing Services Receivables, and Leased Department Receivables) that satisfy the following criteria at the time of creation and continue to meet the same at the time of such determination: such Account (a) has been earned by performance and represent the bona fide amounts due to a Borrower from an Account Debtor, and in each case originated in the ordinary course of business of such Borrower, and (b) in each case is acceptable to the Administrative Agent in its Permitted Discretion, and is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (s) below. MrMonarch does a complete analysis and reporting of all inventory valuations and status. The borrowing base is a metric commercial lenders use to measure the value of assets a business can pledge as collateral for an asset-based loan . The valuation used for equipment should be listed as the current value of the equipment and not the initial retail value. The borrower must also provide the lender with certain information used to determine the borrowing base, including data on sales, collections, and inventory. Home Equity Loan vs. HELOC: Whats the Difference? AssetArchive products shine But real success means understanding the local markets you servewhich is why we bring the business solutions, insights and market perspective you need. Image Source: www.publishedguides.ncua.gov. HELOC (Home Equity Line of Credit) and Home Equity Loan: Comparing Your Options, What Is a Loan, How Does It Work, Types, and Tips on Getting One, Collateralization: Definition, How It Works, Examples, 5 Cs of Credit: What They Are, How Theyre Used, and Which Is Most Important, Personal Loan Interest Rates: How a Personal Loan Is Calculated, Unsecured Loans: Borrowing without Collateral, Cabot Oil & Gas Corporation Form 10-Q, March 31, 2016. : zq[! B) Foreign accounts - The accounts receivable ineligible foreign receivables amount. Interpreting the Revolver: Growing vs. Declining Balance. In determining the amount to be so included, the face amount of a Credit Card Receivable shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Borrower may be obligated to rebate to a customer, a Credit Card Issuer or Credit Card Processor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Credit Card Receivable but not yet applied by the Loan Parties to reduce the amount of such Credit Card Receivable. The borrowing base is the maximum amount of money that can be borrowed based on the value of a companys collateral for an asset-based loan. You need to account for depreciation when determining the current value of any equipment being considered in the borrowing base. The standard advance rate for real estate loans is based on the appraised fair market value. The various components of inventory costs (materials, labor and overhead) and how they are impacted by manufacturing efficiencies (or more importantly inefficiencies). Click the links below for secure access to your accounts: Commercial Lending, Financing & Corporate Bank Loans, Asset Based Lending (ABL) & Secured Commercial Loans, Aerospace, Defense and Government Services. Used by To get the most accurate estimate of a borrowing base, you will need to be familiar with the various discount rates. A borrowing base certificate is used to list all of your available assets that can be used as collateral for a loan and to determine the borrowing base using the discount rate of the lender. Intercompany Receivables means all account, note or loan payables and all advances (cash or otherwise) or any other extensions of credit that are receivable by Seller or any of its Affiliates (other than the Bank or the Transferred Subsidiaries) from the Bank or the Transferred Subsidiaries. network of users that includes the largest lenders, many who From there, lenders make adjustments to account for specific risks, informed by the firm's credit policies. For example, if the value of the collateral drops, the credit limit declines along with it. An asset-based facility is right for borrowers with cyclical or seasonal businesses, businesses looking to facilitate a generational change in ownership or recapitalize their business, and businesses looking to make acquisitions or pay dividends. $5 Million to $15 Million Asset-Based Facilities Common Candidates for $5 Million to $15 Million Asset-Based Loans Common candidates are borrowers that have significant asset value and are looking to leverage these working capital assets. ineligible collateral, terms and Turnover are A) Other - The equipment ineligible A amount. changes in trends, turnover and dilution (Pro Borrowing Base Calculation Service. Actual advance rates subject to appraisal or field exam results. After applying the discount rate to each asset type, you will then add the three figures together to determine the borrowing base. MrMonarch determines your client's borrowing base ineligibles after auditing and analyzing all AR data via advanced data mining techniques developed both in house and commercially. SOP 50 10 7Section B, Ch 1: Standard 7(a) Loans. ABL-Help is a single A lender may disclose either the advance rate, the discount rate, or the LTV threshold. Specializing in training for IA's and CA's to do Borrowing Base Calculations, Risk Management Services for the Commercial Financial Industry. 5 MINUTES. Collateralization is the use of a valuable asset to secure a loan against default. Furthermore, the borrowing base can be adjusted downward to protect the lender. ABL-Help is THE After an initial review of your business needs and credit approval, we provide a term sheet that includes terms, conditions, pricing and closing conditions. Credit Card Receivables means each payment intangible (as defined in the UCC) together with all income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to a Loan Party resulting from charges by a customer of a Loan Party on credit or debit cards issued by such Credit Card Issuer in connection with the sale of goods by a Loan Party, or services performed by a Loan Party, in each case in the ordinary course of its business. Borrowing Base Deficiency means, as of any date, the amount, if any, by which the Total Outstandings on such date exceeds the Borrowing Base in effect on such date. The borrowing base represents the amount of liquid assets securing the revolver, which are usually accounts receivable and inventory.
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