Borrowing base certificate
Draft definition. Technical and editorial approval pending.
The periodic document you deliver showing eligible collateral, applicable deductions and the resulting borrowing limit against drawn debt. It is the operational proof that you remain within your facility limits. Certificates are usually signed by a named officer, and inaccurate certificates can carry consequences well beyond the arithmetic error itself under the facility documents.
In practice
In a fictional case, USD 9m eligible collateral at 80% gives a USD 7.2m limit. If USD 7.2m is already drawn, this calculation supports no additional debt. More qualifying collateral or a repayment may create headroom, subject to the commitment cap and the other funding conditions.
Read this in context: Getting to Close.