Excess Availability

Last Updated: Jun 7, 2019

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The amount generated by applying the stated advance(s) rate to the eligible portion of the collateral and then subtracting the outstanding loan balance against that collateral. This term is generally used in asset based revolving loan facilities but it can also apply to any secured loan facility where borrowing capacity is determined by stated advance rates and eligible collateral balances.

Note that this does not usually apply to term loans secured by fixed assets. Such loans typically have an initial outstanding balance determined by an advance rate applied to the appraised value of the term loans. The amounts repaid against the outstanding obligations typically can not be re-borrowed by the company. Term loan availability is typically the amount of outstanding obligations secured by that specific collateral and there is no excess availability.