Borrowing Base RCFs For Commodity Traders

Borrowing Base RCF For Commodity Traders

Borrowing Base RCF For Commodity Traders

If you trade physical commodities and want predictable liquidity against stock and receivables, a borrowing base revolver is the core tool. We arrange senior secured RCFs sized to a clean, verifiable base with tight controls. You get faster draws, fewer disputes, and clearer risk allocation between you and the lender.

Snapshot: Senior secured borrowing base RCF. Eligible inventory and short-dated receivables. Advance rates set by price risk, liquidity, and controls. Weekly borrowing base certificates. Field exams and appraisals. LC sublimit available when required by suppliers.

Who We Serve

  • Physical traders with repeat flows and audited books.
  • Producers and processors with approved storage and traceable title.
  • Distributors with short-dated receivables and strong buyer performance.

Facility Overview

Item Standard Terms
Facility Type Senior secured revolver with borrowing base, optional LC sublimit
Facility Size Tailored to need and base quality, typical USD or EUR 10m to 150m
Tenor 12 to 36 months, annual redetermination
Pricing SOFR or EURIBOR plus margin, line and commitment fees by usage
Collateral Package All-assets lien where possible, security over inventory, receivables, and controlled accounts

Borrowing Base Formula

Component Eligibility and Advance
Inventory Approved grades, approved warehouses, clean title. Priced at lower of cost or market with haircuts. Typical advance 50% to 80% of net liquidation value by commodity and liquidity.
Receivables Less than 60 to 90 days from invoice, no cross-aged or affiliate AR, clean concentrations. Typical advance 70% to 90% by buyer quality and dilution.
Reserves Pricing reserve, FX reserve, in-transit reserve, liens and taxes, and any specific legal or operational reserve required by the lender.
Concentration Limits By buyer, by warehouse, by grade, and by geography. Excess above limits is ineligible.

Controls and Reporting

Control Standard
Borrowing Base Certificate Weekly BBC with supporting schedules and price feeds
Field Exams and Appraisals Initial exam before close, periodic exams and appraisals thereafter
Account Control Blocked or controlled accounts for collections, cash sweeps by trigger
Insurance and Warehousing All-risk cover with lender loss payee, approved warehouse receipts, collateral access rights

Hedging and Covenants

  • Documented hedging policy tied to open inventory and receivables exposure.
  • Minimum liquidity and working capital tests with cure mechanics.
  • Leverage and interest cover appropriate to business volatility.
  • Limits on dividends, acquisitions, and additional liens while the facility is drawn.

Procedures and Timeline

  1. Initial screen, 1 to 3 business days. Fit check with summary pack and basic KYC.
  2. Mandate and retainer. Engagement signed, underwriting starts.
  3. Underwriting, 5 to 10 business days. Credit memo, base build, sanctions, and compliance.
  4. Indicative terms. Size, pricing, controls, covenants, and closing conditions.
  5. Due diligence, 10 to 20 business days. Field exam, appraisal, legal docs, and account control.
  6. Close and first draw. Conditions satisfied, facility activated, first borrowing against the certified base.
Typical end to end timing after a complete file is 4 to 8 weeks. Complex collateral or new jurisdictions can require more time.

Documentation Checklist

Category Required Items
Corporate and KYC COI, bylaws, UBOs, resolutions, group chart, sanctions and AML pack
Financials Audited statements 2 to 3 years, interims YTD, cash flow and liquidity view
Collateral Data Inventory listings with locations and grades, warehouse receipts, AR aging and buyer list
Operations and Risk Hedging policy, insurance, logistics chain, standard contracts, and systems overview

Eligibility

  • Operating company with verifiable trade flows and audited or review-level financials.
  • Approved storage, clean title, and clear release mechanics for collateral.
  • Reporting systems that support weekly BBC and daily price capture.
  • KYC and sanctions clearance for all material parties.

FAQ

Can the facility include an LC sublimit

Yes. Many facilities include a standby or trade LC sublimit for suppliers and logistics providers. Usage counts against the borrowing base.

How are prices and haircuts set

Lenders use approved pricing sources and apply haircuts by grade, liquidity, and volatility. The appraisal and initial exam define the methodology.

What happens if the base falls

You post cash, reduce drawings, or increase eligible collateral. Cure periods and sweep mechanics are defined in the documents.

Financely is a private credit and capital advisory. We are not a lender and we do not issue commitments. All work is best efforts and subject to KYC, AML, and screening. Bank, legal, appraisal, and field exam costs are separate and paid directly by the client. This page is marketing material, not a commitment to lend.

Get Started With Us

Submit Your Deal & Receive a Proposal Within 1-3 Working Days

Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.


All submissions are promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.

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Request a Proposal / Submit a Deal

Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.

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Once we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.

Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.

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If you still have questions after visiting our FAQ and Procedure pages, we invite you to book a paid consultation for personalized guidance. A $250 USD fee applies per session.