BUSINESS FINANCE GLOSSARY
Borrowing Base
Borrowing Base
The value of eligible collateral used to determine available credit.
What does Borrowing Base mean?
The value of eligible collateral used to determine available credit. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Borrowing Base in context
A line may allow 80% of eligible receivables, less reserves.
Why it matters in financing
Borrowing Base can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related business finance terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.