The borrowing base is recalculated as your collateral changes, often weekly or monthly. The lender starts with your receivables and inventory, removes what it deems ineligible, applies an advance rate to each category and subtracts any reserves. Your availability is the base minus what you have already drawn.
Example: You have $400,000 in receivables, of which $50,000 is over 90 days old and ineligible. At 85%, the eligible $350,000 supports $297,500. Add $200,000 of inventory at 50%, or $100,000, and the base is $397,500. With $300,000 drawn, you can borrow $97,500 more.
Watch for anything that shrinks the base quickly: a big customer paying late, a cap on inventory or a new reserve. If the base drops below what you owe, you may have to repay the difference right away.