In contrast to the usual working capital financing, the availability of the credit facility on a borrowing base depends on the amount of assets eligible as collateral, making it to a "breathy credit". The eligible working capital is usually, but not necessarily, used as collateral for the borrowing base credit. The credit agreement thereby defines certain current assets as eligible, which by evaluating them at a specified percentage result in the borrowing base value. This sets for a pre-defined time interval the upper limit of the possible utilization under the agreed credit limit.
The team of Koch Ritter Lender Services GmbH has over 20 years of experience in this field. Originally used exclusively for the trade finance sector, we were during our time at ING BHF-Bank one of the first within the German market who offered Borrowing Base Facilities to German mid-caps expanding the range far beyond the common commodities.
Through our Borrowing Base expertise, in both trade finance and in the mid-cap sector, we are your perfect partner for both the conception and launch of Borrowing Base as a new product as well as for audits of already existing Borrowing Base Facilities.
We offer both a more simplified inspection of the relevant secured premises as part of a security transfer agreement as well as the comprehensive review of all current assets, being inventory and accounts receivable.
Due to our long experience in this area we have already conducted such audits in almost all relevant industries, both domestically and abroad. The scope of the audit to be determined by the client, depending on his needs, can be just a verification of the inventories and accounts receivable or go into depth, i.e. being an analysis of risk management in relation to (i) commodity price risk, (ii) currency risk and (iii) credit risk of the debtors or (iv) in respect of accounts payable and accounts receivable management. Our aim is to provide our clients timely information necessary to make a well-founded credit or investment decision (i.e. acquisitions).
In addition we offer our clients the option to present in detail the results of the due diligence /collateral field audit personally vis-a-vis the competent credit committee or within a presentation to the participating banks in case of club deals or syndications.
Our risk analysis consists of a due diligence on site to assess the overall credit risk. Such Auditing could be focused for example on the purchasing policy, production mode, internal guidelines and operating instructions in relation to the financial accounting, purchasing and sales, the analysis of risk management in terms of commodity price risk, currency risk and credit risk of debtors and in terms of accounts payable and accounts receivable management.
Ultimately, our experts take a close look at the points that do not appear in any balance sheet, but can still be vital for the success or failure of the company.
The outsourcing of business processes according to § 25a (2) KWG under the primacy of the requirements of MARisk AT 9 is already heavily used by many commercial banks.
We offer you the opportunity to use us as an outsourcing company, for example, for the valuation of collateral and / or the analysis/review of collateral reports.
