How to Set Up Warehouse Receipt Finance with a Named Collateral Manager
You want working capital against stock without selling it today. Lenders want real control of title, storage, and release. The bridge is a warehouse receipt facility with a named collateral manager and tight documents. Follow this and you will get to first draw without drama.
Outcome:
a signed facility that advances against eligible inventory held under a collateral management agreement, with daily reporting, tested release mechanics, and a clean repayment waterfall.
When Warehouse Receipt Finance Fits
Use case
In-warehouse or in-tank goods at named terminals awaiting sale, transfer, or processing.
Tenor
Short cycle 30 to 180 days tied to stock turns and sales contracts.
Goods
Oil products, metals, agri, and other storable commodities with verifiable specs and liquid markets.
No-go
Unverified warehouses, uncontrolled releases, unverifiable quality, or sanctions exposure.
How the Structure Works
| Piece |
What it does |
Proof or control |
| Warehouse receipts or tank warrants |
Evidence of title and quantity in storage |
Originals in lender or collateral manager custody |
| Collateral Management Agreement (CMA) |
Gives physical control and release rules |
Tri party agreement with lender rights and audit |
| Insurance and endorsements |
Covers loss, leakage, contamination, and liability |
Lender as loss payee, endorsements attached |
| Controlled collections |
Cash waterfall to repay draws from sales |
Account control agreement and assigned proceeds |
Collateral Manager Standards Lenders Expect
Track record
Recognized firm with references in your product and corridor. No mystery shell operators.
Reporting
Daily stock, movements, shrinkage, and variance reports with signoff.
Control
No release without lender consent. Dual control on seals and sampling.
Audit and access
Unannounced inspection rights for lender and insurer. Clear incident escalation.
Step by Step to First Draw
| Stage |
What happens |
Tips that speed approval |
| 1) Intake |
KYC, goods list, specs, storage sites, warehouse contracts, and sales pipeline |
Pre name collateral manager and warehouse before credit review |
| 2) Term sheet |
Advance rates, eligibility, price haircuts, tenor, covenants, and reporting cadence |
Keep eligibility simple and objective to avoid weekly fights |
| 3) Underwriting |
Risk memo, valuation method, shrinkage assumptions, legal checks on title and liens |
Provide lien searches and any landlord waivers upfront |
| 4) Documents |
Facility, CMA, account control, insurance endorsements, inspection and sampling SOPs |
Run a dry release test with all parties before go live |
| 5) First draw |
Receipts lodged, reports issued, borrowing base calculated, funds released |
Lock reporting times and point people on both sides |
Borrowing Base Essentials
| Element |
Typical approach |
| Eligible stock |
Named SKUs or grades, in named sites, under CMA control only |
| Valuation |
Market index less haircut or recent transaction price, whichever is lower |
| Advance rate |
50 to 85 percent based on product liquidity and control strength |
| Concentration caps |
Per product, site, and buyer to avoid single point risk |
| Clean downs |
Periodic full paydowns or inventory turns to prove cycle health |
Fees and Cost Buckets
| Bucket |
Who pays |
Notes |
| Interest or margin |
Borrower |
On drawn amount, tied to risk and tenor |
| Arrangement and underwriting |
Borrower |
Covers diligence, modeling, legal review |
| Collateral manager |
Borrower |
Daily control, reporting, audit support |
| Inspection and lab |
Borrower |
Sampling, quality certs, shrinkage tests |
| Insurance and endorsements |
Borrower |
Cargo, storage, liability, loss payee |
| Warehouse or terminal charges |
Borrower |
Storage, handling, and release fees |
Common Pitfalls That Kill WR Deals
- Warehouse or terminal will not grant lender control or audit rights
- Collateral manager lacks scale or the insurer refuses to endorse policies
- Eligibility rules so complex that half your stock is ineligible every week
- Valuation method not tied to a transparent market index or recent trades
- Release process untested until a vessel arrives and everything jams
Attention.
Idle stock burns cash and storage fees.
Desire.
Turn inventory into draw capacity with tight control and quick releases.
Action.
Send storage sites, product list, sales pipeline, and preferred collateral manager. We will return advance rates, eligibility, docs, and a go live plan.
How We Get WR Facilities Approved
Lender route
Trade banks and private credit desks that fund your product and corridor.
CMA and site pack
Negotiated CMA, terminal terms, release SOPs, and audit rights ready to sign.
Borrowing base model
Eligibility, haircuts, and clean down logic tied to real turns and prices.
Execution control
We run the dry tests, lock reporting cadence, and track first draws against dates.
Deliverables
- Named lender and collateral manager shortlists with timing
- Draft CMA, account control, and insurance endorsements
- Borrowing base and eligibility schedule with concentration caps
- Release SOP and dry run checklist with contact matrix
- Closing checklist from engagement to first draw
Ready to Finance Stock in Warehouse
Share storage locations, products, expected turns, and buyer list. We will bring back advance rates, lender options, a CMA draft, fee elements, and a timeline to first draw.
Start the Process
This page is informational. Any facility is subject to lender due diligence, independent credit approval, KYC and AML checks, sanctions review, and executed documentation. Advance rates and pricing depend on goods, site controls, insurance quality, and market conditions.