Borrowing base verification that rebuilds every certificate from the borrower’s own reports
A monthly tie-out in under an hour, not a day.
See one case, screen by screen ↓It is the work of proving a borrower’s borrowing base certificate before an advance: tying the receivable aging to the ledger and the bank, testing eligibility, checking the inventory and recalculating availability. Borrowing Base Verification does that for every certificate, with six agents that rebuild the base from the borrower’s own reports and a collateral analyst who decides the advance.
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Every figure on a borrowing base certificate comes from the borrower: the receivable aging, the inventory report, the ineligibles it chose to deduct, the loan balance it copied over. Each month the collateral analyst re-keys the certificate into a spreadsheet, ties the aging to the ledger control account, rolls receivables forward against the lockbox deposits and tests the eligibility rules on a sample — before trusting the excess availability the borrower wants to draw against.
Done by hand, that is about a day per certificate. And because the numbers all start with the borrower, an invoice billed before it shipped, a past-due invoice re-issued with a new date, a customer who is also a supplier or goods sold but still on the stock report pass unless someone happens to look. The field exam that would catch them comes a few times a year, on a sample, weeks after the advance went out.
Estimated split for one monthly certificate with its supporting reports, by hand and with the solution. The agents finish in under two minutes, so their steps round to zero; what is left is the analyst’s review and decision.
Six specialist agents rebuild the borrowing base from the borrower's own reports; the collateral analyst decides the advance.
Brennick Industrial Supply sends certificate 41 as of 30 September with seven reports and asks for a $1,150,000 advance. Here is what happens on Monday morning, screen by screen, in the working solution.
Renée opens the borrowing base as a waterfall: gross receivables of $14,862,410 stepping down by the three ineligibles Brennick deducted — over 90 days, foreign uninsured, affiliates — to receivable availability. Excess availability is certified at $2,094,528, enough to cover the $1,150,000 asked and $94,528 above the $2,000,000 weekly reporting trigger.
“line 23 of the certificate · not yet tied to a single report”
Instead of trusting the certificate, Renée rebuilds it from Brennick’s own aging, payables aging, trial balance, lockbox statement, stock report and shipping log. Six agents work in the rebuild log, and every ineligible the certificate left out lands in the waterfall as its own red step while the availability figure falls with it.
New red step: “Concentration over 20% — $445,000 not on the certificate” · found by Eligibility tester
$188,700 of Lakemont Tractor’s $362,900 is over 90 days — 52%. Above 50%, the credit agreement makes the whole balance ineligible; the certificate took out only the past-due part. The other $174,200 is added, and the panel behind the bar links the aging and the credit agreement clause it rests on.
The availability view carries both waterfalls through the rent reserve for the Fort Wayne warehouse, the revolver and the letters of credit. The borrowing base is $16,628,340 and excess availability $815,000. The advance bar now reads: only $815,000 available, hold $335,000.
“6 of 6 steps not on the certificate · $1,279,528 of availability”
Renée clicks gross receivables and opens the trial balance at the line: account 1200, accounts receivable — trade, $14,618,960. The aging totals $14,862,410. The difference is exactly three Corwell Agricultural Equipment invoices dated 29–30 September that the shipping log shows leaving on 6 October.
The tie-out puts the certificate as submitted beside the recalculated figure: 23 of 23 lines tied to the aging, ledger, lockbox, inventory or agreement, over-stated by $1,279,528 — five differences in receivables, one in inventory. The run shows what each agent read and found, and each difference carries links to the documents behind it.
Comparing September’s aging with August’s, invoice by invoice: 11 Dunmore Implement invoices dated 12–28 June were cancelled by credit memos on 24 September and re-issued on 25–29 September with no new shipment. By their first dates they are 94 to 110 days old — $281,630 ineligible.
“11 invoices moved from 61–90 days to current”
The decision walks from the certified figure to the recalculated one, a step per difference. Below $2,000,000 Brennick must certify weekly and the fixed charge coverage test springs — at 1.12x against a 1.00x minimum, it passes. Renée asks the assistant to order a targeted field exam of the re-dated and pre-billed invoices; Ravel Field Examinations can be on site Monday 19 October, at the borrower’s cost.
Renée approves with the meaning of her signature — “Tied out — fund to recalculated availability” — and her password. Because the differences exceed $250,000, it goes to Martin Halloran, who co-signs on mobile two minutes later. Terrence Boyd books it for the 2 pm wire, and the notice to Gail Prescott lists all six differences.
“Decided in 38 minutes of review — under an hour, not a day.”
Brennick’s page shows certified against recalculated availability month by month — falling for a year, with the gap growing — next to dilution, the certificate history and a timeline of field exams, appraisals and amendments. Certificates 30–38 were replayed when Brennick moved to the solution in July.
The same certificate, seen by the four people who carry it from received to wired — what their month looked like, and what it looks like now.
Six specialist agents rebuild the borrowing base from the borrower's own reports; the collateral analyst decides the advance.
Reads the borrowing base certificate — PDF, spreadsheet or portal form — checks its arithmetic and the signer, and checks the loan balance and letters of credit against the loan system.
Ties the receivable aging to the ledger control account, rolls receivables forward, and ties collections to the lockbox and bank statements — looking for customer payments outside the lockbox.
Applies the credit agreement’s eligibility rules customer by customer and invoice by invoice: over 90 days, cross-aging, concentration, contra against the payables aging, foreign, affiliates, billed before shipment against the shipping log.
Compares this aging with last month’s invoice by invoice — re-dated invoices, credit-and-rebill, new large customers.
Ties the perpetual report to the ledger by location, applies the inventory ineligibles and the appraisal, and matches invoiced orders to stock still on hand.
Recalculates availability, sizes the advance, flags the credit agreement’s triggers, lists the conditions and drafts the notice to the borrower.
Decides; portfolio manager co-signs when differences are material. The agents propose; a named person decides.
The analyst can ask why a figure moved, or tell it what to do next. Every answer cites the aging, memo or clause it rests on.
Why are the Dunmore invoices called re-dated?
Because the same eleven amounts were on the August aging with June dates — invoices 05112 to 05470, dated 12 to 28 June, in the 61–90 day column, $281,630. On 24 September each was cancelled by a credit memo marked “pricing correction” and re-issued on 25–29 September for the same amount, but the shipping log has no shipment to Dunmore in September. By their first dates they are 94 to 110 days old, so §1.1(h) makes them ineligible. I am not saying why it happened; I have listed them for you and the field examiner.
Where does the $1.28 million difference come from?
Six items the certificate did not deduct: billed before shipment (Corwell), re-dated invoices (Dunmore), concentration (Vantor), cross-aging (Lakemont), a contra account (Halvern) and goods sold but still in stock (Vantor bill-and-hold). Receivables take off $1,088,578 at 85%, inventory $190,950 at 60%. Excess availability is $815,000, not $2,094,528. Everything else ties — the ledger roll-forward, the lockbox, the loan balance and the UCC search.
What changes now that availability is $815,000?
Two clauses in §6.12 turn on below $2,000,000 of excess availability: Brennick must send certificates weekly, from Wednesday 21 October, and the fixed charge coverage test springs. On the Q2 compliance certificate coverage is 1.12x against a 1.00x minimum, so it passes today. The advance is capped at $815,000; anything above it is an over-advance and needs Sofia Lindqvist.
Order a field exam on the re-dated and pre-billed invoices
Done. I have asked Ravel Field Examinations for a targeted exam: the 11 Dunmore credit memos and re-issued invoices, the 3 Corwell invoices and their bills of lading, and a sample of September shipments. Joel Ambrose can be on site Monday 19 October; the cost goes to the borrower under §6.9. It is now a condition on the advance and in the notice to Gail Prescott.
13 screens from the working solution, on its sample data. Pick one to see it large.
Advance rates, eligibility rules, tolerances, triggers and approvers are set per facility, from its credit agreement.
| Setting | Default | Choose from |
|---|---|---|
| Receivable advance rate | 85% of eligible | 70–90% |
| Eligible inventory | 60% of cost or 85% of NOLV, the lesser, up to $9,000,000 | 55% of cost or 85% of NOLV · 85% of NOLV · sublimit $8,000,000 or $10,000,000 |
| Approvals | Collateral analyst alone up to $500,000, within tolerance | $250,000 · $1,000,000 · second signature above $250,000 of differences · credit officer for over-advances |
| Cross-aging | 50% of a customer’s balance past due | 25–75%, in steps of 5 |
| Concentration | 20% of receivables per customer | 10–30%, in steps of 5 |
| Billed before shipment · re-dated invoices | Ineligible | On · off |
| Difference tolerance | $25,000 or 0.5% of availability | $10,000 · $50,000 or 1% of availability |
| Weekly certificates and fixed charge coverage test | Below $2,000,000 of excess availability · minimum 1.00x | $1,500,000 · $2,500,000 |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample portfolio data · “target” = the design goal, measured in the live solution · “estimated” = our estimate (about a day per certificate by hand) · “typical” = published figures (OCC Comptroller’s Handbook, Asset-Based Lending — receivable advance rates commonly 70–85%; dilution usually expected to be 5% or less). People, borrowers, banks and companies named on this page are fictional — characters and sample data in the working solution.
It is the work of proving a borrower’s borrowing base certificate before an advance: tying the receivable aging to the ledger and the bank, testing eligibility, checking the inventory and recalculating availability. Borrowing Base Verification does that for every certificate, with six agents that rebuild the base from the borrower’s own reports and a collateral analyst who decides the advance.
It reads the certificate and the reports that come with it — the receivable and payables agings, the trial balance, the lockbox statement, the stock report and the shipping log. It recomputes every line from those sources against the facility’s eligibility rules and advance rates, and shows the certified and recalculated figures side by side, each difference tied to the line that causes it.
Every customer, against every rule, on every certificate. On the sample certificate that is 412 customers and 3,906 invoices, tested for over 90 days, cross-aging, concentration, contra accounts, foreign and affiliate balances and billing before shipment.
Yes. The aging change detector compares this month’s aging with last month’s, invoice by invoice, and flags invoices cancelled by credit memo and re-issued with a newer date and no new shipment. It shows the evidence to a person; it never calls anything fraud.
No. The agents recommend an amount and its conditions; the collateral analyst approves with a signature that records its meaning. Above $250,000 of differences the portfolio manager co-signs, and an advance above recalculated availability needs the credit officer too.
Borrowing base certificates as PDF, spreadsheet or portal form; receivable and payables agings; the general ledger trial balance; bank and lockbox statements; the perpetual inventory report, shipping log and appraisal; the credit agreement; and the loan system for balances and letters of credit.
Yes, per facility. Advance rates, the inventory formula and sublimit, past-due, cross-aging and concentration limits, contra treatment, the dilution reserve, the difference tolerance, the weekly reporting trigger and the approval limits are all settings, versioned and on the audit trail.
The Agentic Solution Engine builds and deploys it from your requirements — your credit agreements, certificate formats and a sample of past certificates with their reports — and it goes live once every quality gate has passed. We will show it to you on your own borrowers’ certificates first.
We’ll run Borrowing Base Verification on a sample of your own borrowers’ certificates and reports.