Tag

availability

2 insights

A grid of six months by two testing conventions. Tested on current month MRR, availability falls below the $3.8 million drawn in the last three months, producing deficiencies of $120,000, $340,000 and $376,000. Tested on a trailing six-month average, headroom stays positive at $150,000, $110,000 and $40,000.

The Multiple Works in Both Directions

A software company draws $3.8 million against a facility sized at five times MRR. One bad quarter cuts MRR 21 percent, and availability recalculates to $3.42 million, putting the limit $376,000 below the balance already drawn.
Financing StrategyBorrower Advisory
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Proportional circles showing a borrowing base of $8.30 million at closing and $6.88 million after the first field exam, with four smaller circles for the adjustments between them: $765,000 of pre-billed invoices, $240,000 of rent reserve, $213,000 from excess dilution and $200,000 of demo units.

The Borrowing Base Shrank After the First Field Exam

A $60 million hardware reseller closed an asset-based line on an $8.30 million borrowing base. The first field exam tested the same collateral and found $6.88 million, and planned headroom of $1.80 million fell to $382,000.
Financing StrategyBorrower Advisory
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