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An example of a borrowing base certificate used in asset-based lending. Borrowing base certificate is the official accounting document prepared by the borrower that certifies the size of the borrowing base of an organization with the previously agreed advance rates. [11] Borrowing base certificate includes a summary calculation sheet.
For example, a renewable energy project might secure a $1,000,000 revolving credit facility. When the project draws $400,000 for operational expenses, it is charged an upfront fee—typically around 1.5% of the total facility (amounting to $15,000)—and interest is assessed on the drawn amount.
Forms of loan agreements vary tremendously from industry to industry, country to country, but characteristically a professionally drafted commercial loan agreement will incorporate the following terms: Parties to contracts with their addresses; Definitions or interpretation provisions; Facility and purpose [a] Conditions precedent to utilization
A cleanup clause is a contractual provision in a loan agreement which provides that all loans must be repaid within a specified period, after which no further loans will be made available to the debtor for a specified "cleanup" period. It may also refer to revolving line of credit.
In practice, this length of time is generally between 10-20 days. Warehouse facilities typically limit the amount of dwell time a loan can be on the warehouse line. For loans going over dwell, mortgage bankers are often forced to buy these notes off the line with their own cash in anticipation of a potential problem with the note.
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