Revolving Credit Facility — Indicative Term Sheet
Revolving Credit Facility: Indicative Term Sheet
This indicative term sheet matches the framework in our Revolving Credit Facility guide. It describes a receivables-backed revolving line sized by a borrowing base, priced as U.S. Prime plus a negotiated margin. Interest is charged on drawn balances only. Lenders are selected through a controlled auction after underwriting. Ranges below are typical and finalized during credit approval and documentation.
Indicative Term Sheet
| Item | Term | Notes |
|---|---|---|
| Borrower | Corporate borrower meeting eligibility criteria | Operating history 24 to 36 months, verifiable financials, recurring invoicing |
| Arranger / Role | Financely Group as arranger, structurer, and distributor | We do not lend from our balance sheet |
| Lender | Bank or credit fund in our forward flow network | Selected after controlled auction and formal approvals |
| Facility Type | Receivables-backed revolving credit facility | Optional conservative inventory component if approved |
| Purpose and Use of Proceeds | Working capital, inventory procurement, bridging receivable cycles | Not for speculative activity or unrelated long term investments |
| Commitment (Ceiling) | USD 1,000,000 to USD 25,000,000 typical | Ceiling generally up to 80% of prior 12 months invoicing; larger by exception |
| Borrowing Base Formula | Availability = AR Advance + Inventory Advance − Reserves | Calculated on certificates; replenishes as collections are received |
| AR Advance Rate | 80% to 90% of eligible accounts receivable | Rate set in underwriting based on quality and concentrations |
| Inventory Advance Rate | 25% to 50% of finished goods, if included | Enhanced monitoring and periodic exams required |
| Eligible Receivables Criteria | Invoice age 0 to 90 days, non-disputed, non-intercompany, enforceable terms | Foreign AR eligible with mitigants such as credit insurance or limits |
| Ineligible Receivables | Past due beyond aging cap, cross-aged, contra, intercompany, disputed, setoff risk | Detailed in the facility agreement schedule |
| Obligor Concentration Caps | 20% to 30% per obligor; excess subject to haircut | Caps adjusted for obligor quality and sector risk |
| Pricing | APR = U.S. Prime + 1.00% to 3.00% per annum | Interest on utilized balances only; actual over 365 day count; margin set in underwriting |
| Interest Payments | Monthly in arrears on used amounts | No PIK interest; cash pay only unless otherwise agreed for workouts |
| Unused Commitment Fee | 0 bps standard; 25 to 75 bps if capacity reservation is requested for large lines | Applies only if negotiated for larger commitments |
| Tenor and Renewal | 12-month committed revolving term, renewable by mutual consent | No prepayment penalty for voluntary paydown or early termination |
| Amortization | None; interest-only until maturity with revolver mechanics | Utilization reduces as collections sweep to the lockbox |
| Security Package | First-priority lien on accounts receivable and proceeds; optional lien on inventory and general intangibles if included | Perfection by filings and control agreements; intercreditor if required |
| Collections / Lockbox | Payments to controlled account or lockbox in lender’s name | Collections reduce outstanding and restore availability automatically |
| Reserves | General reserve 0% to 5%; tax, dispute, or documentation reserves as needed | Removed once conditions are remedied and performance stabilizes |
| Reporting and Exams | Borrowing base certificate monthly; AR and AP aging monthly; field or desktop exams semiannual to annual | Weekly reporting during initial ramp-up may be required |
| Affirmative Covenants | Maintain books and records, tax compliance, insurance, timely reporting, compliance certificate quarterly | Standard receivables facility undertakings |
| Negative Pledge and Liens | No competing liens on pledged collateral without lender consent | Permitted liens limited to ordinary course items and agreed baskets |
| Financial Covenants | Minimum liquidity USD 250,000 to USD 1,000,000; minimum tangible net worth 75% to 100% of current level; maximum total leverage 3.0x to 4.0x | Calibrated to sector, size, and variability of cash flows |
| Fees to Arranger (Financely) | Engagement fee USD 9,850 to USD 25,000; success fee 2.00% of committed facility at initial closing | Funds underwriting, diligence, data room, and auction administration |
| Third-Party Costs | Estimated USD 15,000 to USD 65,000 | Lender counsel, filings, insurance reviews, and any required exams; paid by borrower at cost |
| Drawdown Mechanics and Timing | Draw requests via lender portal; typical funding T+1 to T+2 after approval | Subject to availability and no default |
| Conditions Precedent | KYC, AML, sanctions clearance; executed documents; perfection; lien releases; insurance evidence; clean tax status | All to lender satisfaction before first draw |
| Events of Default | Non-payment, covenant breaches, misrepresentation, cross-default, insolvency, sanctions breach, change of control without consent | Standard ABL remedies including acceleration and sweep |
| Governing Law and Jurisdiction | State of New York law; New York courts | Alternative jurisdictions can be negotiated if required |
| Offer Validity | 30 calendar days from issuance, 17:00 New York time | Subject to market conditions and no material adverse change |
| Timeline to Close | 2 to 6 weeks from engagement to first draw | Depends on document readiness and lien releases |
Pricing Reference
APR is calculated as U.S. Prime plus the contractual margin. Typical margins for qualified borrowers fall within Prime + 1.00% to Prime + 3.00%. Interest is calculated on an actual over 365 basis and charged on drawn balances only.
Check Current Prime RateNext Steps
- Submit audited or reviewed financials, year-to-date management accounts, AR and AP aging, top customer list, sample invoices, corporate documents, and KYC.
- Engage the mandate and pay the engagement fee so we can open the data room and begin underwriting.
- Compete the facility through our term sheet auction and close with the lender you select.
Request a Mandate
If your receivables are clean and collections are predictable, we can run underwriting and a competitive auction to secure lender term sheets.
Request a ProposalThis indicative term sheet is for discussion only and is not a commitment to lend. Any facility is subject to lender credit approval, satisfactory completion of KYC, AML, and sanctions screening, execution of definitive documentation, and perfection of security interests. Economics and advance rates are set by the selected lender and may vary with the borrower’s credit profile and market conditions.
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