Asset-Based Lending: Navigating the Borrowing Base ...

[Pages:33]Presenting a live 90-minute webinar with interactive Q&A

Asset-Based Lending: Navigating the Borrowing Base, Article 9 Collateral Issues, And Key Loan Documentation Provisions

THURSDAY, JANUARY 7, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

Today's faculty features: Harvey C. Guberman, Partner, Ballon Stoll Bader & Nadler, New York Paul B. Hahn, Partner, Platzer, Swergold, Levine, Goldberg, Katz & Jaslow, New York Scott A. Lessne, Senior Counsel, Crowell & Moring, Washington, D.C.

Jenny E. Cieplak, Counsel, Crowell & Moring, Washington, D.C.

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Asset-Based Lending: Navigating the Borrowing Base, Article 9 Collateral Issues and Key Loan Documentation Provisions

Panelists: Jenny E. Cieplak

jcieplak@

Harvey C. Guberman

hguberman@

Paul B. Hahn

phahn@

Scott A. Lessne

slessne@

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I. Overview ? The Role of Asset-Based Lending

A. Provides working capital B. Finances the most liquid assets in the borrower's

business

1. Liquidity spectrum ? cash, receivables, inventory, machinery and equipment, real estate

C. Forms of loan facilities

1. Revolving credit ? committed and uncommitted 2. Floor planning facilities 3. Factoring arrangements

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II. Overview ? Collateral

A. Asset-based lending is a subcategory of secured lending

B. How much a lender will be willing to lend at any one time is governed by the quantity and quality of the assets securing the loan

C. The concept of "eligibility is at the heart of the `borrowing base'" ? the calculation used to determine how much is appropriate to lend

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D. The definitions of eligibility and borrowing base formula limitations reduce the amount of cash advances available to a borrower, based on its total pool of accounts and inventory

1. Lenders will not lend dollar-for-dollar 2. Establishing a balance between collateral quality,

collateral value and lending level is critical and will vary from loan to loan

Total Pool of Assets Perfected Security Interest

Eligibility Criteria Borrowing Base Limitations

Cash Advance Availability

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