Eligible Inventory Definition
(Asset-Based Loan Agreement)

Summary

This eligible inventory definition clause is used in an asset-based loan agreement. In asset-based loans, this is the inventory that a company owns to be included in calculation of the borrowing base, and usually includes finished goods and marketable raw materials. This clause includes practical guidance, drafting notes, and alternate and optional clauses. Conform the capitalized terms to defined terms in the relevant credit agreement. Read in conjunction with the practice notes Eligibility Criteria, Inventory and Equipment Borrowing Eligibility Criteria and Advance Rates for Eligible Assets — Inventory Advance Rate. See also Borrowing Base Definition (Asset-Based Loan Agreement). For a full listing of key content covering asset-based lending, including agreements, security, guaranties, perfection, and priorities, see Asset-Based Lending Resource Kit.