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
- Initial screen, 1 to 3 business days.
Fit check with summary pack and basic KYC.
- Mandate and retainer.
Engagement signed, underwriting starts.
- Underwriting, 5 to 10 business days.
Credit memo, base build, sanctions, and compliance.
- Indicative terms.
Size, pricing, controls, covenants, and closing conditions.
- Due diligence, 10 to 20 business days.
Field exam, appraisal, legal docs, and account control.
- 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.