What AR aging buckets are ineligible in the Eligible Receivable definition?
Aging buckets past the credit-agreement Eligible Receivable cutoff are ineligible. Barnes & Noble's credit agreement (SEC EX-10.1) excludes “Accounts that have been outstanding for more than ninety (90) days from the invoice date or more than sixty (60) days past the due date.” OCC and Don Clarke often list about 90 days; cross-aging can make a customer's entire balance ineligible.
Last updated: September 12, 2026
Buyer answer: aging buckets past the Eligible Receivable cutoff
Aging buckets past the credit-agreement Eligible Receivable cutoff are ineligible for the borrowing base. OCC Comptroller's Handbook: Asset-Based Lending restores the contiguous three-times-terms sentence. Don Clarke lists industry convention of unpaid 90 days from invoice date or 60 days past stated due date. ABF Journal lists three times standard customer payment terms, with the Net-30 example reaching 90 days from invoice date or 60 days from the due date. NC Examiners labels the same concept Over Eligible Days—receivables past the lender-defined aging period.
Past-due / three-times-terms cutoffs
The OCC ABL handbook says: "Normally, an account is considered ineligible collateral when it is past due by three times the terms, e.g., 90 days for 30-day terms and 21 days for seven-day terms." OCC also defines ineligible collateral as pledged receivables that do not meet the criteria specified in the loan agreement. Don Clarke lists the aged-invoice step: remove invoices typically over 90 days from invoice date, or over 60 days past stated due date, depending on the credit agreement. LenderAnalyzer lists past dues first as three times standard customer terms or 60 days past the due date, so a Net 30 invoice goes ineligible around 90 days from invoice date. eCapital lists aged receivables past a stated day count (e.g., 90 days) as often ineligible.
Cross-aging can wipe a customer's entire balance
OCC states that underwriting agreements specify that all of a party’s accounts are designated ineligible when any (or some percentage) of that customer’s receivables become ineligible—referred to as cross-aging—and glossary language sometimes calls a common 10 percent delinquency threshold the "10 percent rule." LegalClarity states that if 10% or more of a customer’s total outstanding balance is past due, the entire balance can be classified ineligible, with some agreements at 25% to 33%. Don Clarke lists a typical past-due share of 20 to 50 percent depending on the agreement. LenderAnalyzer lists 20 percent as a common cross-age trigger.
Sample clause and CFR appendix
A Justia First Advantage Eligible Receivables carve-out with 60 days or more after the due date, 90 days past the invoice date, and a 25% customer past-due wipe of all receivables from that customer. Cornell LII lists a CFR / FDIC appendix ineligible-AR list with balances over 90 days beyond invoice date or 60 days past due, and entire account balances where over 50 percent of the account is over those windows.
| Claim | Listed | URL |
|---|---|---|
| OCC ABL: past due by three times the terms | Normally, an account is considered ineligible collateral when it is past due by three times the terms, e.g., 90 days for 30-day terms and 21 days for seven-day terms. | OCC ABL handbook PDF |
| OCC ABL: cross-aging mechanic | most underwriting agreements specify that all of a party’s accounts are designated ineligible collateral when any (or some percentage) of that customer’s receivables become ineligible. This is referred to as cross-aging. | OCC ABL handbook PDF |
| OCC glossary: cross-aging / common 10 percent rule | Cross-aging: The practice of making all of the accounts receivable from a single account party (the obligated party for an account receivable) ineligible to be included in the borrowing base if a specified proportion of the total accounts receivable from that party is delinquent. Sometimes referred to as the “10 percent rule” because 10 percent of an individual party’s accounts is a common delinquency threshold. | OCC ABL handbook PDF |
| OCC glossary: ineligible collateral = loan-agreement criteria | Ineligible collateral: Pledged receivables or inventory that do not meet the criteria specified in the loan agreement. | OCC ABL handbook PDF |
| Don Clarke: industry 90-from-invoice / 60-past-due convention | Industry convention is that any invoice unpaid 90 days from invoice date or 60 days past its stated due date is considered past due and ineligible. | Don Clarke eligible vs ineligible |
| Don Clarke: cross-age 20 to 50 percent depending on the agreement | If a meaningful portion of a single customer's balance is past due -- typically 20 to 50 percent depending on the agreement -- the entire balance from that customer becomes ineligible, including invoices that are not themselves past due. | Don Clarke eligible vs ineligible |
| Don Clarke: remove aged invoices (credit-agreement-set 90/60) | Remove aged invoices — typically any invoice over 90 days from invoice date, or over 60 days past stated due date, depending on the credit agreement. | Don Clarke cross-aging math |
| ABF Journal: three-times-terms / 90-from-invoice / 60-from-due | Across the ABL industry, a reasonable timeframe is generally considered three times the standard customer payment terms. So, for example, if the borrower offers standard payment terms of net 30 days to its customers and a customer has not paid its invoice in 90 days from invoice date (three times the terms) or 60 days from the due date (invoice date plus the standard payment term), it is reasonable to assume there might be issues with collectability of the receivable. | ABF Journal AR ineligibles |
| LegalClarity: cross-age 10% or 25% to 33% depending on agreement | That means if 10% or more of a customer’s total outstanding balance is past due, the lender classifies the entire balance from that customer as ineligible. Some agreements set the threshold higher, at 25% to 33%, particularly for lower-risk portfolios or industries where slower payment cycles are normal. | LegalClarity cross-aging |
| eCapital: aged receivables often ineligible (e.g., 90 days) | Aged Receivables: Accounts receivable that are past due beyond a certain number of days (e.g., 90 days) are often considered ineligible. | eCapital ineligibles |
| LenderAnalyzer: past-due window three-times-terms / 60 past due / ~90 from invoice | Past dues come first: invoices unpaid beyond a reasonable window, commonly defined as three times the standard customer terms or 60 days past the due date, so a Net 30 invoice goes ineligible around 90 days from invoice date. | LenderAnalyzer |
| LenderAnalyzer: cross-aged ineligibles common 20 percent trigger | Cross-aged ineligibles knock out the rest of a customer balance when a set share of that customer is already past due, 20 percent being the common trigger. | LenderAnalyzer |
| NC Examiners: Over Eligible Days = lender-defined aging period | Over Eligible Days refers to receivables that exceed the lender-defined aging period. These are considered ineligible as collateral because they have a higher risk of being uncollectible. | NC Examiners Over Eligible Days |
| Cornell LII CFR appendix (regulatory sample): over-90 / over-60 and 50% cross-age list | Accounts receivable balances over 90 days beyond invoice date or 60 days past due, depending upon custom with respect to a particular industry with appropriate adjustments made for dated billings; (ii) Entire account balances where over 50 percent of the account is over 60 days past due or 90 days past invoice date; | Cornell LII 12 CFR appendix C (sample) |
| Justia First Advantage Eligible Receivables carve-out | the account is outstanding: (i) 60 days or more after the due date; or (ii) 90 days past the invoice date; (bb) the account receivable is owed by a customer who is 60 days or more past the due date on 25% or more of its obligations owed to the Borrower or any Included Subsidiary (in which event all receivables owed by the customer to the Borrower or such Included Subsidiary shall be deemed ineligible); | Justia contract clause sample |
Frequently asked questions
What AR aging buckets are ineligible in the Eligible Receivable definition?
Aging buckets past the credit-agreement Eligible Receivable cutoff are ineligible. OCC, Don Clarke, and ABF often treat invoices unpaid about 90 days from invoice date, about 60 days past due, or past due by three times terms as past-due ineligible. Cross-aging can make a customer's entire balance ineligible when a credit-agreement past-due share trips.
Is the aging cutoff always 90 days?
No. The credit agreement sets the Eligible Receivable aging cutoff. OCC lists past due by three times the terms (for example, 90 days for 30-day terms). Don Clarke and ABF list industry convention around 90 days from invoice date or 60 days past due / from the due date.
What is cross-aging in an Eligible Receivable definition?
OCC states that underwriting agreements often designate all of a customer's accounts ineligible when any (or some percentage) of that customer's receivables become ineligible—called cross-aging—and glossary language sometimes calls a common 10 percent delinquency threshold the "10 percent rule." LegalClarity lists 10% or higher thresholds such as 25% to 33% in some agreements. Don Clarke lists typical past-due shares of 20 to 50 percent depending on the agreement.
What does Over Eligible Days mean for AR aging ineligibles?
NC Examiners states that Over Eligible Days refers to receivables that exceed the lender-defined aging period and are considered ineligible as collateral because they have a higher risk of being uncollectible. That label tracks the credit-agreement Eligible Receivable aging cutoff.
Related
- Before binding an ABL revolver, which AR lines are ineligible and which get carved back at term sheet?
- Does cross-aged AR count toward the borrowing base at term sheet?
- What is the difference between a dilution reserve and ineligible AR?
- What is a concentration reserve or single-debtor cap in an ABL facility?
- Does contra or affiliate AR count toward the borrowing base at term sheet?
- What is a borrowing-base certificate and when must it be submitted?