Borrowing Base

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Definition: Borrowing Base

Borrowing Base
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Full Definition of Borrowing Base

The amount of money a lender will loan to a company, based on the value of the collateral pledged by the company. A company can use various things for collateral, including inventory, company equipment, or even accounts receivable. The lender determines a discount factor, a certain percentage which is multiplied against the value of the collateral, and the resulting value is the amount of money that will be available to loan to the company. For example, if a company has inventory worth $100,000, and the lender’s discount factor is 50%, the borrowing base is $50,000.

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https://payrollheaven.com/define/borrowing-base/
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Borrowing Base. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
April 20, 2024 https://payrollheaven.com/define/borrowing-base/.
Chicago Manual of Style (CMS):
Borrowing Base. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/borrowing-base/ (accessed: April 20, 2024).
American Psychological Association (APA):
Borrowing Base. PayrollHeaven.com. Retrieved April 20, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/borrowing-base/

Definition Sources

Definitions for Borrowing Base are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.