Every Draw and Distribution Depends on Getting the Math Right
The borrowing base determines how much a borrower can draw against eligible collateral, while the waterfall determines cash distribution among lenders and parties. Both are governed by deal-specific rules and must be recalculated continuously as collateral and cash flows change.
Common challenges:
- Calculating borrowing base availability across large, changing collateral pools
- Applying deal-specific advance rates, eligibility criteria, and reserves
- Producing accurate, multi-tier cash flow waterfalls
- Keeping calculations current as collateral and balances fluctuate
Precise Calculations, Every Reporting Period
Borrowing Base Calculation:
Ongoing calculation of borrowing base availability against eligible collateral.
Advance Rate & Reserve Application
Application of deal-specific advance rates, reserves, and eligibility criteria.
Waterfall Calculations
Accurate cash flow and payment waterfalls across lenders, tranches, and parties.
Cash Sweep & Allocation
Calculation of cash sweeps and allocation of principal, interest, and fees.
Ongoing Recalculation
Continuous updates as collateral, balances, and cash flows change.
Small Errors Compound Into Large Ones
A miscalculated borrowing base can allow an overdraw, and a miscalculated waterfall can misdirect cash. In transactions with thousands of collateral lines and multiple parties, spreadsheets do not scale and errors compound quickly. Lenders need calculations they can rely on every reporting period.
Built for Lenders and Managers Running Collateral-Based Facilities
We support private credit managers, asset-based lenders, and structured finance participants who need dependable borrowing base and waterfall calculations across their facilities.
Built to Handle Complex Calculations at Scale
PCS/1 processes tens of thousands of lines of collateral and applies bespoke borrowing base and waterfall rules deal by deal, giving clients confidence in every calculation.
Frequently Asked Questions
Choosing an operational partner is an important decision. Whether you’re moving away from spreadsheets, replacing a provider, or preparing for growth, we’re committed to providing the transparency and expertise you need to make an informed choice.
What is a borrowing base?
The borrowing base is the amount a borrower can draw against eligible collateral, calculated using deal-specific advance rates, eligibility criteria, and reserves.
What are waterfall calculations?
Waterfall calculations determine the order and amount in which cash flows are distributed among lenders, tranches, and other parties, as defined in the transaction documents.
Why not manage this in spreadsheets?
As collateral pools grow and structures get more complex, spreadsheets become slow and error-prone. PCS/1 applies the rules consistently and at scale, reducing risk.
Who needs this service?
Private credit managers, asset-based lenders, and structured finance participants running collateral-based facilities.
What technology supports this service?
Our proprietary platform, PCS/1, applies bespoke borrowing base and waterfall rules across large collateral pools.
What are waterfall calculation services?
Waterfall calculation services involve applying transaction priority-of-payment rules to determine how available cash is allocated among fees, expenses, interest, principal, reserves, investors, lenders, and other participants. Oak Branch uses PCS/1 technology.
Can Oak Branch build waterfall calculation dashboards?
Yes. Oak Branch can create customized dashboards that display waterfall outputs, payment priorities, available cash, distributions, shortfalls, overcollateralization tests, reserve movements, and period-over-period changes.
Can PCS/1 support borrowing base calculations?
Yes. PCS/1 can support borrowing base calculations by applying eligibility rules, advance rates, concentration limits, exclusions, reserves, and other borrowing base mechanics.
