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Borrowing Base Certificate

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BORROWING BASE CERTIFICATE

Lender Name:    Borrower Name:

Reporting Period End Date:    Certificate Date:

1. Instructions and Basis of Calculation

The undersigned officer certifies that the calculations set forth below constitute the Borrowing Base as defined in the Credit Agreement dated between Borrower and Lender. The Borrowing Base is prepared in accordance with the definitions, eligibility criteria and reserves set forth in the Credit Agreement and applicable loan documents. All amounts are presented in U.S. dollars and reflect adjustments reasonably required by Lender.

2. Schedule A — Accounts Receivable

Attach a detailed aging and listing of accounts receivable. Enter summarized lines below:

Debtor / Description
Gross AR
Deductions / Ineligible
Eligible Amount
Totals

3. Schedule B — Inventory

Provide summarized inventory categories. Include reserves or exclusions required by the Credit Agreement.

Inventory Category / Location
Cost / Value
Eligible Amount
Inventory Totals

4. Summary Calculation

5. Certifications and Representations

The undersigned certifies, on behalf of Borrower, that as of the Reporting Period End Date specified above:

  • All accounts and inventory included in the Borrowing Base are bona fide, arising in the ordinary course of business and subject to the applicable security interests set forth in the loan documents, except as disclosed in writing to Lender.
  • No Default or Event of Default has occurred and is continuing under the Credit Agreement, except as described in the space provided below.
  • All reserves, deductions and ineligibilities required by the Credit Agreement have been applied in the computations shown.
  • There are no material undisclosed disputes, credits, chargebacks or collection offsets affecting the accounts included in Schedule A, except as set forth below.

The undersigned further certifies that the information set forth in this Borrowing Base Certificate is true, correct and complete in all material respects and fairly presents the Borrowing Base in accordance with the Credit Agreement.

6. Affirmations

The officer executing this Certificate on behalf of Borrower affirms that he or she is duly authorized to execute and deliver this Certificate and that the representations contained herein are made subject to the penalties of perjury for false statements.

7. Acknowledgement by Lender

Lender acknowledges receipt of this Borrowing Base Certificate. Acknowledgement does not constitute Lender's acceptance of calculations where Lender's own audits or review reveal discrepancies; Lender may, in its sole discretion, request supporting documentation, make adjustments and reserve rights under the Credit Agreement.

Borrower — Printed Name:

By:

Date:

Lender — Printed Name:

By:

Date:

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What a Borrowing Base Certificate Is and why it matters

A Borrowing Base Certificate is a financial statement the borrower provides to a secured lender showing the value of eligible collateral that supports a credit facility. It typically aggregates eligible accounts receivable, inventory, work-in-progress and other lender-approved assets, applies reserves and exclusions, and computes the borrowing base and the available advance. Lenders use the certificate to confirm compliance with loan covenants, determine availability of funds, and trigger periodic funding or holdback mechanics under the loan agreement.

Why accurate Borrowing Base Certificates reduce lender and borrower risk

A clear, accurate certificate reduces funding disputes, shortens review cycles, and helps both parties monitor covenant compliance. Regular, consistent submissions limit draws that exceed collateral values and provide an auditable basis for correspondence between borrower and lender.

Why accurate Borrowing Base Certificates reduce lender and borrower risk

Who prepares and who reviews Borrowing Base Certificates

Typical creators and reviewers include accounting staff at the borrower, credit analysts at the lender, and external auditors or trustees when required.

  • Borrower accounting teams prepare schedules, reconcile sub-ledgers, and certify that supporting documents match reported balances.
  • Lender credit and collateral officers verify eligibility, apply advance rates and reserves, and approve or adjust available borrowing amounts.
  • External auditors or trustees may spot-check calculations, review supporting documentation, and confirm compliance with security agreements.

Responsibilities vary by role: preparers collect and reconcile schedules; reviewers verify calculations, apply reserves, and authorize funding or remedial steps.

Step-by-step: Preparing a reliable Borrowing Base Certificate

Follow a consistent sequence each reporting period to reduce errors and speed lender review.

  • 01
    Gather source files: Pull AR ledger, inventory reports, invoices, and credit memos.
  • 02
    Reconcile balances: Match schedules to the general ledger and resolve discrepancies.
  • 03
    Apply eligibility rules: Exclude ineligible items and calculate reserves per the loan agreement.
  • 04
    Certify and submit: Have an authorized officer sign and send the certificate to the lender.

Core parts of a professional Borrowing Base Certificate

A complete certificate includes numerical schedules, calculations, disclosures, and an authorized certification to support lender review and audit.

Collateral Schedule

Detailed line items for accounts receivable, inventory, and other eligible assets with supporting sub-totals and references to backup documents for auditability and traceability.

Borrowing Base Formula

The calculation applying advance rates, caps, and concentration limits to eligible asset totals producing the maximum borrowing base available under the credit agreement.

Reserves

Explicit list and explanation of reserves and exclusions (concentration, slow-moving inventory, deductions for disputed receivables) that reduce availability.

Supporting Schedules

Aging reports, invoice lists, purchase orders, and inventory count reconciliations that substantiate reported balances and assist lender sampling or audit.

Certifications

A signed statement by an authorized officer attesting to accuracy and completeness, and acknowledging any exceptions or post-period events affecting eligibility.

Exception Notes

Concise narrative of disputes, pledged or encumbered assets, or subsequent events the lender needs to consider when assessing collateral value.

Required data fields at a glance

Borrower Name: Legal entity
Reporting Date: MM/DD/YYYY
Eligible AR Total: Whole dollars
Eligible Inventory: Whole dollars
Calculated Borrowing Base: Formula result
Authorized Signer: Name and title

Customize an online workflow for recurring submissions

Configure fields, recipients, authentication, and document retention to match the loan agreement and audit requirements.

Field Configuration
Reporting Date Field Required | MM/DD/YYYY
Signature Field Required | Authorized officer
Authentication Email + optional SMS code
Retention Settings Store signed PDF and audit trail

Where to send the certificate and how review works

Route the signed certificate and supporting schedules to designated lender contacts, using the delivery and access controls specified in the loan documents.

  • Submit to Lender: Email or secure portal per agreement
  • Lender Verification: Credit team checks calculations and eligibility
  • Reconciliation: Lender requests backup or explanations for exceptions
  • Funding Decision: Available advance approved or adjusted

Distribution and eSubmission best practices

Use secure transmission, clear recipient lists, and preserved audit trails when sharing certificates and attachments.

  • Integrations: CRM and ERP connectors
  • Formats Supported: PDF, DOCX, XLSX
  • Authentication: Email, SMS, or stronger

Typical submission schedule and lender deadlines

Timeliness is contractually defined; common cadence is monthly with specific cutoff and funding windows the parties must observe.

Reporting Frequency:

Monthly or weekly per loan agreement

Submission Cutoff:

Often within 5 business days after period end

Lender Review Window:

Lenders commonly allow 3–10 business days

Funding Effective Date:

Advance dated to lender approval date

Year-End Reconciliation:

Annual audit or true-up per agreement

Common preparation mistakes to avoid

  • Using inconsistent valuation methods across periods, which causes reconciliation failures and lender questions during sampling or audits.
  • Submitting incomplete supporting schedules or missing invoices, forcing lenders to suspend funding until documentation is provided.
  • Failing to apply contractually required reserves or concentration limits, leading to abrupt funding adjustments or covenant breaches.
  • Allowing timing mismatches between ledger balances and reported cut-off dates, producing overstated eligible amounts.

Consequences of inaccurate or late certificates

Covenant Breach: May trigger default remedies
Funding Withheld: Lender can reduce or deny advances
Fees and Interest: Late fees or penalty interest
Increased Reserves: Higher dilutions or holding reserves
Audit Demand: Formal audit or third-party review
Collateral Remedies: Enforcement or foreclosure risk

Typical eSignature vendor pricing and capability snapshot

Compare common vendor pricing and features relevant to signing and distributing Borrowing Base Certificates and supporting schedules.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently asked questions about Borrowing Base Certificates

Answers to common procedural and legal questions about preparing, signing, and submitting borrowing base certificates.


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