What is the difference between a field exam and monthly borrowing-base reporting?
Last updated: August 27, 2026
What is a borrowing-base certificate?
The borrowing-base certificate (BBC) is a report the borrower submits to the ABL lender listing eligible accounts receivable, inventory, and other collateral. Bank of America Business Capital states that "you will typically need to provide monthly reports updating the status of your borrowing base." The OCC Comptroller's Handbook on Asset-Based Lending notes that "an ABL lender often requires borrowing base certificates and supporting documentation on a weekly or monthly basis." The certificate calculates availability by multiplying eligible collateral by advance rates, then subtracting reserves. The lender uses the BBC to determine how much the borrower may draw against the revolver. The borrower prepares the BBC based on its own accounting records.
What is a field exam?
A field exam (also called a collateral audit or field examination) is an on-site or remote audit conducted by the lender or a third-party field examiner to verify the borrower's collateral. The OCC Comptroller's Handbook states that "the bank should conduct regular borrower reviews and field audits as part of the due diligence and ongoing monitoring processes." The examiner reviews AR aging reports, inventory counts, account reconciliations, and internal controls. The field exam validates that the borrower's monthly borrowing-base certificates are accurate and that the collateral reported actually exists and meets the Eligible Receivable and Eligible Inventory definitions.
What a field exam reviews
- AR aging accuracy: Comparing invoices to the aging report to verify dates and amounts.
- Inventory counts: Observing or testing physical inventory to confirm reported quantities.
- Ineligible exclusions: Checking that ineligible AR (cross-aged, contra, foreign, etc.) is properly excluded from the borrowing base.
- Financial controls: Reviewing accounting procedures, segregation of duties, and cash handling.
- Concentration limits: Verifying that customer concentration and other reserves are correctly calculated.
| Verification method | Frequency | Who prepares/conducts |
|---|---|---|
| Borrowing-base certificate | Monthly (Bank of America: "you will typically need to provide monthly reports updating the status of your borrowing base") | Borrower self-reports based on its accounting records |
| Field exam | OCC: "often quarterly but more frequently if risk dictates" | ABL lender or third-party field examiner audits collateral on-site or remotely |
Sources: OCC Comptroller's Handbook: Asset-Based Lending, Bank of America Business Capital
Related topics
- Before binding an ABL revolver, which AR lines are ineligible?
- Borrowing base certificate monthly compliance
- Work-in-process schedule borrowing-base certificate
Frequently asked questions
What is the difference between a field exam and monthly borrowing-base reporting?
Monthly borrowing-base reporting is the borrower's self-reported certificate of eligible AR and inventory submitted each month to calculate availability. A field exam is a third-party verification conducted by the lender or its agent to audit the borrower's collateral, AR aging, inventory counts, and financial controls. The OCC Comptroller's Handbook on Asset-Based Lending states that field exams are "often quarterly but more frequently if risk dictates." Bank of America Business Capital states that "you will typically need to provide monthly reports updating the status of your borrowing base."