Borrowing base

A formula determining how much can be borrowed against eligible receivables.

Why it matters

In asset-based lending, the borrowing base limits credit availability to a percentage of eligible receivables. This concept is related to factoring but distinct from a purchase-based structure.

Related terms

Related article: How invoice factoring works

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.