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A borrowing base certificate looks like a one page summary. It is not. Behind the eligible collateral figure sits a stack of exclusion tests that have to be applied line by line against an AR aging that can run thousands of invoices, and almost every ABL shop in the country still applies them in Excel. That spreadsheet decides how much a borrower can draw this week.
The tests themselves are standard across the industry. Past dues, cross-aging, concentration limits, contra offsets, COD accounts, foreign receivables and federal receivables account for most of what gets held ineligible on a typical facility. What is not standard is the data going in. The aging arrives as a PDF from one borrower, a printout from a legacy ERP from the next, and a spreadsheet with merged cells from the third. Someone has to turn all three into a clean customer level table before a single eligibility rule can run.
That is the part software should be doing, and it is the part most ABL platforms assume is already done. This page covers what actually goes into a borrowing base, the seven exclusion tests you have to apply, how concentration limits are computed, and where LenderAnalyzer fits: reading the borrower documents and rebuilding the aging so your eligibility rules have something reliable to run against.
The exclusion categories and rationales below follow the standard set laid out by ABF Journal for accounts receivable ineligibles. The thresholds quoted are the common market examples, not universal rules: your credit agreement governs, and advance rates, caps and reserves are negotiated facility by facility. Last updated August 2026.
The formula is simple and the inputs are not. Eligible accounts receivable multiplied by the AR advance rate, plus eligible inventory multiplied by the inventory advance rate, minus reserves, capped by the facility commitment. AR advance rates commonly sit in the 80 to 85 percent range and inventory well below that, because inventory is harder to liquidate. The number that moves week to week is not the advance rate, it is the word eligible. Take a $4,000,000 gross aging, hold $600,000 ineligible across the seven tests, apply an 85 percent advance rate to the remaining $3,400,000 and the borrower has $2,890,000 of availability before reserves. Get the ineligibles wrong by ten percent of the aging and you have misstated availability by roughly $340,000 in either direction. That is the whole reason this calculation is policed.
Past dues come first: invoices unpaid beyond a reasonable window, commonly defined as three times the standard customer terms or 60 days past the due date, so a Net 30 invoice goes ineligible around 90 days from invoice date. Cross-aged ineligibles knock out the rest of a customer balance when a set share of that customer is already past due, 20 percent being the common trigger. Concentration limits hold the excess over a per customer cap. Payable contra offsets exclude customers who are also vendors, at the lower of the payable or the otherwise eligible amount, because in a liquidation they will net the two. COD and cash accounts are excluded because a customer with no credit terms should not be carrying a balance at all. Foreign accounts domiciled outside the United States are excluded where UCC filings and US enforcement do not reach them. Federal accounts are excluded unless the borrower has complied with the Assignment of Claims Act, since without it the government can pay the borrower directly and your lien never touches the cash.
A concentration limit caps how much of the eligible collateral any single account debtor may represent, most commonly at 20 percent, sometimes tightened to 10 or 15 percent for weaker credits and loosened to 25 or 30 percent for investment grade debtors named specifically in the agreement. The mechanics matter: the cap applies to the excess, not the customer. If one debtor is 34 percent of a $4,000,000 aging under a 20 percent cap, you hold the 14 percent excess ineligible, roughly $560,000, and the first 20 percent stays eligible. The trap is that the cap is computed against a denominator that is itself changing. Every other exclusion test shrinks the eligible pool, which raises every remaining customer as a percentage of it, which can push a second debtor over the cap. Run the tests in the wrong order and the answer is wrong.
Factors and invoice finance providers use the same idea under a different name. A debtor concentration limit is the ceiling a factor sets on any one of the client's customers as a share of the funded ledger, and it is usually stricter than a bank ABL cap because the factor is buying specific invoices rather than lending against a revolving pool. Many facilities run a general cap with named exceptions for large, well rated debtors. The commercial reason is blunt: if a client sells 60 percent of its output to one buyer and that buyer stops paying, the client's ability to survive and the collateral both fail at the same moment. The limit is not really about collectability of the invoice, it is about correlated failure.
Dilution is the share of gross receivables that never converts to cash: credit memos, returns, allowances, discounts, short pays and write offs. It is measured as credits and non cash reductions over gross sales, usually on a rolling twelve month basis, and it is the single most watched number in an ABL field exam. Many agreements set a dilution reserve that scales as measured dilution rises above an agreed baseline, which pulls availability down independently of the aging. Reserves for rent in landlord states, accrued taxes, unpaid wages and the like sit on top. None of this appears in the aging file itself, which is exactly why a certificate that is arithmetically perfect can still overstate what the collateral is worth.
Every eligibility rule assumes one thing: a clean, customer level, bucketed aging. That assumption fails at the intake step more often than anywhere else in the process. Borrower agings arrive as scanned PDFs, exports from ERP systems that stopped being supported a decade ago, spreadsheets with subtotal rows mixed into the data, and agings whose bucket boundaries do not match the ones in your credit agreement. LenderAnalyzer reads those files and returns a structured table: customer, invoice, date, due date, amount and aging bucket, plus the financial statements, tax returns and bank statements that sit alongside the collateral analysis. It rebuilds the aging so your eligibility rules, whether they live in a monitoring platform or in your own spreadsheet, are running against data somebody did not retype at 11pm.
LenderAnalyzer is a document analysis layer, not an ABL monitoring platform. It does not hold your credit agreement rules, does not maintain a daily availability ledger, does not run a borrower portal for certificate submission, and does not replace ABLSoft, Covaleyo or a comparable collateral monitoring system if that is what you need. What it replaces is the manual work of turning borrower paper into usable data before those systems can do anything with it. Plenty of ABL teams run both, and plenty of smaller shops that keep the borrowing base in Excel simply need the aging and the financials read accurately and fast.
A borrowing base certificate is prepared by the borrower. That single fact is why field exams exist. The certificate says what the borrower says the collateral is, and the exam tests it: invoice tracing to proof of delivery, confirmation of a sample of balances, reconciliation of the aging to the general ledger and the sales journal, and measurement of actual dilution against what the borrower reported. Most facilities run exams quarterly to annually depending on facility size and credit quality, with more frequent exams on stressed credits. Software that reads documents shortens exam prep considerably, because the reconciliation between the aging, the financials and the bank statements can be built before the examiner is on site. It does not remove the exam.
How the borrowing base workflow is covered by different kinds of software. Last updated August 2026. None of the ABL monitoring vendors below publish public pricing, so their pricing column says so rather than quoting a figure. Confirm current capability and pricing with each vendor directly. LenderAnalyzer is independent and not affiliated with any vendor listed.
Swipe sideways to see the full comparison
| Tool | What it covers | Reads borrower documents | Published pricing | Best for |
|---|---|---|---|---|
| LenderAnalyzer This page | Reads AR agings, financials, tax returns and bank statements into structured data | Yes, this is the core function | Yes, from $99 a month | Teams that keep the borrowing base in Excel or a monitoring tool and need the paper turned into data |
| ABLSoft | ABL collateral monitoring with a borrower portal for certificate submission | Portal driven submission rather than document extraction | No, contact vendor | ABL lenders wanting a dedicated collateral monitoring system of record |
| Covaleyo (Covarity) | Loan monitoring and covenant tracking across a commercial portfolio | Focused on monitoring and covenants, not extraction | No, contact vendor | Banks monitoring a broad commercial book, not ABL alone |
| Lama AI | Automated borrowing base collection, validation and exception checks | Yes, positions extraction and validation as part of the flow | No, contact vendor | Lenders wanting the borrowing base workflow handled end to end |
| Excel plus a credit agreement | Whatever your analyst builds, which is still the market default | No, someone retypes the aging | Free, and the cost is analyst hours and key person risk | Small ABL shops and single facility situations |
Comparison compiled by LenderAnalyzer from public vendor materials; see the date noted above each table. Competitor names are trademarks of their respective owners; figures may change, so verify current details with each vendor.
Computed deterministically from every extracted transaction, every figure traceable to its source line.
Computed across the full statement period, carried forward day by day.
Deposits vs withdrawals and net flow, broken down month by month.
Every insufficient-funds and overdraft incident counted, with fees totaled.
Recurring deposits grouped into income streams with estimated monthly amounts.
Debits to other lenders and funders detected and totaled per month.
Days below zero across the period, a direct stress signal.
The biggest credits with dates and sources, concentration flagged.
Automatic red and yellow flags your analysts can review in seconds.
Drop in PDFs, scans or photos, one statement or a multi-month package, from any bank.
Every transaction is extracted, then cash flow, balances, income streams, NSF activity and debt payments are computed.
Read the underwriting snapshot, download the Excel report, or pull structured JSON into your LOS via API.
28 lending document types extracted out of the box, build the complete picture of an applicant's financial situation.
Common questions from lending and credit teams.
A debtor concentration limit caps how much of the funded receivables pool any single customer may represent, most commonly at 20 percent of eligible collateral. Anything above the cap is held ineligible and does not generate availability. The purpose is not doubt about that one invoice, it is that a borrower dependent on one buyer fails at the same moment the collateral does.
It is the same test stated from the collateral side: the maximum share of eligible accounts receivable that may come from one account debtor, typically 20 percent, sometimes 10 to 15 percent for weaker debtors and 25 to 30 percent for named investment grade names. The excess over the cap is excluded from the borrowing base. The customer stays a customer, the balance above the cap just stops counting as collateral.
Ineligibles are receivables or inventory a lender will not count toward the borrowing base because they are too risky or too hard to enforce. The standard AR categories are past dues, cross-aged balances, over concentrations, payable contra offsets, COD and cash accounts, foreign receivables and federal receivables without Assignment of Claims Act compliance. Gross collateral minus ineligibles equals eligible collateral, which is what the advance rate is applied to.
Start with the gross AR aging and gross inventory. Apply each exclusion test to get eligible collateral, multiply eligible AR by the AR advance rate, commonly 80 to 85 percent, add eligible inventory at its lower advance rate, then subtract reserves for dilution, rent, taxes and anything else the agreement specifies. The result is availability, capped by the facility commitment.
Cross-aging is the rule that makes an entire customer balance ineligible once a set share of that customer is already past due, commonly 20 percent. If a customer owes $200,000 and $45,000 of it is past the eligibility window, the whole $200,000 goes ineligible, not the $45,000. The logic is that a customer who is not paying part of the balance is a collection problem across the whole balance.
A borrowing base certificate is prepared by the borrower and submitted on the frequency the credit agreement sets, most often monthly and weekly or daily on actively monitored facilities. It typically requires the gross aging, a schedule of each ineligible category with amounts, gross and eligible collateral, the advance rate calculation, reserves, outstanding loan balance, resulting availability, and an officer certification that the figures are accurate.
Eligibility tests are the specific written conditions in the credit agreement that a receivable or unit of inventory must pass to count as collateral. They cover aging, cross-aging, concentration, contra relationships, debtor domicile, government debtors, disputed and consigned items, and the borrower's lien position. They are facility specific, which is why two lenders can look at the same aging and produce different eligible balances.
No. The certificate is borrower prepared, so an independent exam still has to trace invoices to proof of delivery, confirm balances, reconcile the aging to the general ledger and measure actual dilution. Software shortens exam preparation because the aging, financials and bank statements are already reconciled into structured data, but the verification step remains a separate exercise.
How credit teams run these calculations by hand, so you can see exactly what the software automates.
The wider ABL workflow, from collateral read to cash flow and leverage.
The exclusion tests in the order they are applied, with a worked example.
The document that governs how much a revolver can advance.
The receivable concentration math that caps availability.
What a field exam tests and how often lenders run one.
Where debtor concentration and verification matter most.
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