A borrowing base is the amount of money that a lender is willing to loan a company, based on the value of the collateral the company pledges. ... The resulting numerical figure represents the amount of money a lender will loan out to the company.

What is the purpose of a borrowing base?

Lenders use the borrowing base to determine the maximum loan amount that can be offered to a borrower on an asset-based loan. Each borrowing base is unique and determined by the borrower's available assets along with the lender's discount rate or acceptable LTV ratio.

What is borrowing base availability?

Borrowing Base Availability means, at the time of any determination, an amount equal to the lesser of the Borrowing Base at such time and the aggregate amount of the Commitments at such time.