Eligible Account Definition
(Asset-Based Loan Agreement)

Summary

This eligible account definition clause is used in an asset-based loan agreement. Eligible accounts are accounts used in the calculation of the borrowing base. This clause includes practical guidance, drafting notes, and alternate clauses. Conform the capitalized terms to defined terms in the relevant credit agreement. Read in conjunction with the practice notes Eligibility Criteria, Accounts Receivable Eligibility Criteria, and Advance Rates for Eligible Assets. For a full listing of key content covering asset-based lending, including agreements, security, guaranties, perfection, and priorities, see Asset-Based Lending Resource Kit.