Supportable Borrowing Base: The Balance Sheet Ceiling for the Capital Stack Why Facility-Level Compliance Cannot Govern Aggregate Borrowing Capacity A business passes every covenant on every facility and still runs short of cash at the moment the cycle peaks. Each lender reads its own instrument and finds nothing wrong. None of them reads the combined...
The Supportable Borrowing Base: How to Calculate the Maximum Your Balance Sheet Can Sustain Across All Facilities How the Equity Adequacy Test, the NWC Floor Stack Test, and the Debt Service Coverage Test Establish the Binding Ceiling for the Full Stack Most businesses know what their individual facilities will advance. The ABL line has a...
The Equity Adequacy Test: Can Your Balance Sheet Support the Combined Capital Stack? Why individual facility compliance does not prove equity adequacy — and how to test whether your equity base can support current and peak simultaneous draw. A business can draw its ABL facility to the ceiling, deploy its RBF component at peak, and...
