Under our borrowing base/availability program, the borrower uses all of its receivables to form the collateral base. We make advances against the line of credit based on the collateral base which gives your business the freedom to grow.
How our Borrowing Base Financing Works
Allied does all of the work in calculating a daily availability; therefore, our borrowers always know where they stand and can plan accordingly. The borrower can borrow as much or as little as needed up to the available amount under the formula.
Our formulas are straightforward and are updated daily. Allied Financial will make a percent advance against all eligible accounts receivable. Generally, invoices over 90 days, contra accounts, pre-billed invoices and foreign receivables are not eligible for advance purposes.
Allied Financial will cross age the receivables using a 33% cross age rule. Our cross age rule states that if 33% or more of the accounts receivable due from any account debtor is over 90 days past due from the date of invoice, the entire balance may become ineligible for advance purposes.
For example, we will provide a loan based on your company’s total accounts receivable. If your eligible accounts receivable is valued at $500,000, we can give you an 80% ($400,000) advance directly into your bank account.
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