# How does the borrowing base work on a Working Capital CAPLine?

**Short answer:** The lender advances against eligible receivables and inventory reported on a Borrowing Base Certificate. Maximum advance rates are generally 80% of eligible domestic receivables and 50% of eligible inventory. Lines of $2,000,000 or more must use one (SOP 50 10 8.1, Sec. B, Ch. 4, Para. F).

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Last checked: 2026-11-09

The lender advances against eligible receivables and inventory reported on a Borrowing Base Certificate, or BBC. Your availability is the lesser of the borrowing base or the note amount, minus the loan balance (SOP 50 10 8.1, Sec. B, Ch. 4, Para. F).

## When a BBC is required

Lines of $2,000,000 or more must run through a BBC. Smaller lines may use a BBC or a 1:1 collateral ratio instead.

## Maximum advance rates

- Eligible domestic receivables: 80%.
- Eligible insured foreign receivables and prime federal contract receivables: 90%.
- Eligible inventory: 50%.

## What the lender must exclude

- Invoices more than 90 days past due.
- All invoices from a customer delinquent on more than 50% of its outstanding invoices.
- Receivables from affiliates, and offsetting contra accounts.
- Inventory outside the United States or held on consignment.

Some exclusions can be lifted with SBA's prior written concurrence.

## Reporting

One paragraph requires a BBC at least monthly. The monitoring paragraph sets at least quarterly for lines of $2,000,000 or less and at least monthly above that. Ask your lender which schedule it follows. Lines of $1,000,000 or more need a field examination before the first disbursement and annually after that (Information Notice 5000-882227, p. 3).

## Sources

- [SOP 50 10 8.1, Sec. B, Ch. 4, Para. F (p. 154)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SBA Information Notice 5000-882227, p. 3 (Sept. 25, 2026)](https://legacy.sba.gov/document/information-notice-5000-882227-issuance-technical-updates-sop-50-10-81)