Available Commitment Borrowing Base Sample Clauses

The 'Available Commitment; Borrowing Base' clause defines the maximum amount a borrower can draw under a credit facility, based on the value of certain eligible assets (the borrowing base). In practice, the lender periodically assesses the value of the borrower's assets, such as inventory or receivables, and sets the available commitment accordingly, ensuring that the total outstanding loans do not exceed a specified percentage of this value. This clause serves to limit the lender's risk by tying the amount of credit extended to the fluctuating value of the borrower's collateral, thereby protecting the lender from overexposure if asset values decline.