Asset-Based Lending Field Exams

An asset-based lending field exam is an on-site or remote review of a borrower's books and collateral, run by an examiner for the lender, that verifies the receivables, inventory and financial records behind a borrowing base and estimates what the collateral would return in a liquidation. It tests whether the reported numbers are real, whether internal controls are sound, and how the collateral is trending, and its findings set or reset the advance rates and ineligibles on the facility.

Field exams are the verification half of asset-based lending. The borrowing base certificate is what the borrower says; the field exam is what the lender confirms. This article covers what examiners actually test, how often exams happen, what they cost, and how to prepare so an exam confirms your availability instead of cutting it.

Last updated July 2026.

What is a field exam in asset-based lending?

A field exam is an independent review of a borrower's financial records that focuses on the assets securing the loan, most often accounts receivable, inventory and sometimes equipment. The examiner, either the lender's internal ABL team or a third-party field exam firm, tests the accuracy of the reported collateral, evaluates the internal controls around billing and collections, and estimates the net orderly liquidation value of the assets against the lender's exposure. The point is not to catch fraud, though it sometimes does; it is to confirm that the collateral supporting the line is real, current and worth what the borrowing base claims.

The exam sits alongside the monthly borrowing base certificate in the lender's monitoring stack. The certificate updates availability every period from the borrower's own agings; the field exam periodically re-verifies that those agings tie to the general ledger, that the ineligibles are being applied honestly, and that dilution has not quietly eroded the collateral. A lender that reads certificates without ever verifying them is trusting the borrower's spreadsheet, which is exactly what an exam exists to check.

What do field examiners check?

The exam concentrates on the collateral but reaches into everything that could impair it. On receivables, the examiner traces reported balances back to the aging and the general ledger, tests a sample of invoices to shipping and proof of delivery, measures dilution from credit memos and write-offs, and confirms the ineligibles: aged invoices, cross-aged customers, concentrations, affiliates, contras and foreign or government accounts. On inventory, the examiner checks the perpetual records against physical counts, separates finished goods from raw materials and work in process, and assesses obsolescence and net orderly liquidation value.

Beyond the pledged assets, examiners review the cash cycle and the liabilities that can jump ahead of the lender in a workout.

Payroll and sales taxes get particular attention because unpaid trust-fund taxes can take priority over the lender's security interest, so a borrower that keeps its payables and tax obligations current, often by automating accounts payable processing so nothing slips past due, presents a cleaner file than one stretching vendors to fund operations.

How often are ABL field exams required?

Frequency scales with loan size, risk and borrower performance. A stable, well-performing borrower on a modest facility might see one exam a year; a larger, higher-risk or deteriorating credit can be examined quarterly or monthly, and a borrower in a workout may be examined almost continuously. Most credit agreements set a baseline frequency and allow the lender to step it up when excess availability falls below a threshold, a covenant is breached, or the collateral trend turns.

The logic is the same one that governs certificate frequency: the longer the gap between verifications, the longer a deteriorating position stays invisible and the more a borrower can draw against collateral that has already gone bad. Lenders trade exam cost against that blind spot. An initial exam before closing establishes the baseline advance rates; recurring exams keep them honest.

How much does an ABL field exam cost?

Traditional field exams are billed on the examiner's time plus expenses, so cost tracks the scope and the borrower's complexity rather than a fixed rate. A routine exam of a single-location borrower with clean records runs a few examiner-days; a multi-entity or multi-location borrower with weak controls can take a week or more, and travel adds to it. The borrower usually pays, directly or through a field exam fee baked into the facility. A lighter-scope asset quality review, which samples rather than fully tests the collateral, can cost less than half of a full field exam and is used when a full exam is not warranted but some independent verification is.

Because the bill scales with how much digging the examiner has to do, the cleanest way to control exam cost is to hand over records that already reconcile. Every hour an examiner spends rebuilding an aging that does not tie to the ledger is an hour on the invoice.

How do you prepare for an asset-based lending field exam?

Preparation is mostly reconciliation done in advance. Before the examiner arrives, tie the receivables aging to the general ledger, tie the inventory report to the perpetual records, and make sure the last several borrowing base certificates agree with both. Have the ineligibles calculated the way the credit agreement defines them, not the way that maximizes availability, because the examiner will recalculate and the gap becomes a finding. Pull invoice-level support, proof of delivery and cash application for the sample the examiner will request, and be ready to explain any concentration, dilution spike or slow-paying customer before you are asked.

The borrowers who sail through exams are the ones whose numbers already tie out, and that is a documentation problem more than an accounting one. When the aging, the ledger and the bank record tell the same story on the first pass, the exam confirms the base and moves on. When they do not, the examiner starts pulling threads. Keeping the underlying detail structured, so the aging, the financials and the operating account can be reconciled quickly rather than rebuilt by hand, is what turns an exam from a scramble into a formality.

Field exam vs annual review vs audit

These three overlap and get confused. A field exam verifies collateral and controls for an asset-based facility; it is collateral-centric and can happen several times a year. An annual review is the lender's yearly re-underwrite of the whole credit, cash flow included, and typically drives the risk rating refresh. A financial statement audit is the borrower's own CPA opinion on its financials, which the lender relies on but does not perform. A field exam is narrower and more frequent than an annual review and entirely separate from the CPA audit, though a clean audit can reduce how much collateral testing an exam needs.

All three feed the same decision: whether the exposure is still adequately protected. Where the annual review and risk rating weigh cash flow and repayment capacity, the field exam weighs the collateral and the controls around it, which is why lenders that run both cash flow and asset-based structures underwrite them differently, as our comparison of asset-based lending vs cash flow lending lays out.

Where software fits in field exam prep and review

A field exam is document work at its core: agings, ledgers, statements and financials that have to be read, reconciled and tested against each other. Whether you are the borrower preparing for an exam or the lender scoping one, the slow step is turning those documents into structured numbers that tie out. That is the layer LenderAnalyzer handles. It reads the borrower's financial statements, tax returns and bank statements into structured figures, rebuilds operating cash flow from the transactions, and keeps every number traceable to its source, so the reconciliation an examiner performs, and the borrowing base it validates, starts from clean data rather than a stack of PDFs.

LenderAnalyzer does not run the field exam or manage the borrowing base; dedicated asset-based lending software and third-party exam firms do that. It sits underneath both, doing the document analysis that every exam, certificate and credit decision depends on. You can run a real borrower package through the analyzer on our loan underwriting software page and see the spread and cash flow it produces in a couple of minutes.