Glossary · The loan itself
Borrowing base
In short
The maximum amount a lender allows you to draw from a line of credit, based on eligible collateral like accounts receivable and inventory.
What it means in a deal
While less common for standard SBA 7(a) term loans in acquisitions, a borrowing base is crucial if you're getting an SBA-backed line of credit (e.g., SBA Express Line of Credit or a Working Capital Pilot Program loan). The lender will regularly evaluate your collateral to determine how much you can access. Understand the calculation and reporting requirements to manage your cash flow effectively.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Borrowing base
- What specific alternative base rates are permissible for variable rate 7(a) loans?
- What alternative base rate options are available for variable rate 7(a) loans?
- What are the currently approved base rate options for variable rate 7(a) loans?
- What are the current alternative base rate options for variable rate 7(a) loans?
- What are the current alternative base rate options available for variable rate 7(a) loans?
- What is the difference between the base rate and the spread on an SBA 7(a) loan?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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