Does cross-aged AR count toward the borrowing base at term sheet?
At term sheet, cross-aged AR generally does not count toward the borrowing base. Unisys's Bank of America credit agreement (SEC EX-10.3) excludes “Cross Aged Accounts”: “Billed Accounts that are the obligations of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Billed Accounts owing by that Account Debtor are ineligible”. OCC states that “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.” Viemed’s Whitney Bank loan agreement (SEC EX-10.1) states: “The Eligible Accounts shall not be limited or reduced by any customer concentration or cross-aged accounts.”
Last updated: September 13, 2026
Buyer answer: cross-aged AR is carved from the borrowing base
At term sheet, cross-aged AR generally does not count toward the borrowing base. OCC states that “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.” LenderAnalyzer states: “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.”
What OCC lists on cross-aging
The OCC Comptroller's Handbook on Asset-Based Lending states that “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.” Its glossary states: “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.” It also states: “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.”
Example thresholds (agreement-set)
LenderAnalyzer states: “Cross-aging is the rule that makes an entire customer balance ineligible once a set share of that customer is already past due, commonly 20 percent.” Glacier Lake Partners states: “Typically only current and 30-day AR qualify; aged AR is excluded.” It lists “cross-aged accounts (if a customer has more than 50% of their balance over 90 days, the entire balance becomes ineligible)”. LegalClarity states: “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.” Don Clarke states: “If that percentage exceeds the threshold in the credit agreement — most commonly 25 percent, but in some agreements 50 percent — the entire remaining balance from that customer is wiped out of the eligible pool, including invoices that are current.” eCapital states: “if 10% or more of a customer's total outstanding receivables are overdue beyond a certain period (often 90 days), then all of that customer's receivables might be considered high-risk or doubtful.” ABF Journal states: “Based on the loan agreement between the lender and the borrower, if an account receivable has a significant past due balance (for example, 20%), the entire outstanding receivable balance from that customer is treated as at-risk and considered to be cross age ineligible.”
When does cross-aged AR still count? Agreements that switch cross-aging off
Viemed’s Commercial Business Loan Agreement for Term Loans and Lines of Credit with Whitney Bank (SEC EX-10.1), dated February 21, 2018, sets the Borrowing Base at “70.0% of Eligible Accounts” and states: “The Eligible Accounts shall not be limited or reduced by any customer concentration or cross-aged accounts.” It defines a cross-aged account as “any account of Borrower where at least 20% of the outstanding balance of such account has aged in excess of 120 days” and customer concentration as “having in excess of 25% of Borrower’s Eligible Accounts with any single customer (or group of affiliated customers).” Its Eligible Accounts definition excludes “accounts receivable over 90 days from the invoice date giving rise to such account(s)”.
The OCC Comptroller’s Handbook: Accounts Receivable and Inventory Financing says “most underwriting agreements specify that all accounts of a single party will be designated ineligible collateral when any (or some percentage) of that customer’s receivables become ineligible.”
| Filed term | Cross-aging wording (verbatim) | Source |
|---|---|---|
| Cross-aging applies (Unisys / Bank of America) | “Cross Aged Accounts”: Billed Accounts that are the obligations of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Billed Accounts owing by that Account Debtor are ineligible | SEC EX-10.3 |
| Cross-aging switched off (Viemed / Whitney Bank) | The Eligible Accounts shall not be limited or reduced by any customer concentration or cross-aged accounts. | SEC EX-10.1 |
| OCC default practice | most underwriting agreements specify that all accounts of a single party will be designated ineligible collateral when any (or some percentage) of that customer’s receivables become ineligible. This is referred to as “cross-aging.” | OCC ARIF handbook PDF |
Sample clause
A Justia-hosted Hallwood Group sample credit agreement says: Eighty percent (80%) of "cross aged" receivables, such that if twenty percent (20%) or more of any account debtor's receivables are aged more than sixty (60) days from the due date, all receivables from that account debtor shall be deemed ineligible.
| 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 Comptroller's Handbook: Asset-Based Lending |
| 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 Comptroller's Handbook: Asset-Based Lending |
| 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 Comptroller's Handbook: Asset-Based Lending |
| 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 — Borrowing Base Software |
| LenderAnalyzer: cross-aging definition (commonly 20 percent) | Cross-aging is the rule that makes an entire customer balance ineligible once a set share of that customer is already past due, commonly 20 percent. | LenderAnalyzer — Borrowing Base Software |
| LenderAnalyzer: past-due window sibling to cross-aging | 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 — Borrowing Base Software |
| Glacier: cross-aged accounts example (50% over 90 days) | cross-aged accounts (if a customer has more than 50% of their balance over 90 days, the entire balance becomes ineligible) | Glacier Lake Partners — Credit Facility Management |
| Glacier: aged AR excluded from eligibility | Typically only current and 30-day AR qualify; aged AR is excluded. | Glacier Lake Partners — Credit Facility Management |
| Justia sample clause: 20% cross aged / 60 days from due date | Eighty percent (80%) of "cross aged" receivables, such that if twenty percent (20%) or more of any account debtor's receivables are aged more than sixty (60) days from the due date, all receivables from that account debtor shall be deemed ineligible | Justia — Hallwood Group sample credit agreement |
| Don Clarke: cross-aging wipe (commonly 25%; some 50%) | most commonly 25 percent, but in some agreements 50 percent — the entire remaining balance from that customer is wiped out of the eligible pool, including invoices that are current. | Don Clarke — Cross-Aging Borrowing Base |
| Don Clarke: remove aged invoices (90 from invoice / 60 past due) | 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 Borrowing Base |
| Don Clarke: cross-aged receivables range (20 to 50 percent) | 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 Receivables |
| Don Clarke: past-due convention (90 from invoice / 60 past due) | 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 Receivables |
| LegalClarity: cross-aging threshold (10%; some 25% to 33%) | 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 — How Cross-Aging Makes Invoices Ineligible |
| eCapital: cross-aged accounts / 10% rule | if 10% or more of a customer’s total outstanding receivables are overdue beyond a certain period (often 90 days), then all of that customer’s receivables might be considered high-risk or doubtful. | eCapital — Cross-Aged Accounts (10% rule) |
| ABF Journal: cross age ineligible (example 20%) | Based on the loan agreement between the lender and the borrower, if an account receivable has a significant past due balance (for example, 20%), the entire outstanding receivable balance from that customer is treated as at-risk and considered to be cross age ineligible. | ABF Journal — Standard AR Ineligibles |
| Viemed/Whitney Bank: no cross-aging or concentration limit | The Eligible Accounts shall not be limited or reduced by any customer concentration or cross-aged accounts. | SEC EX-10.1 — Viemed / Whitney Bank loan agreement |
| Viemed/Whitney Bank: cross-aged account definition | any account of Borrower where at least 20% of the outstanding balance of such account has aged in excess of 120 days | SEC EX-10.1 — Viemed / Whitney Bank loan agreement |
| Viemed/Whitney Bank: customer concentration definition | having in excess of 25% of Borrower’s Eligible Accounts with any single customer (or group of affiliated customers) | SEC EX-10.1 — Viemed / Whitney Bank loan agreement |
| Viemed/Whitney Bank: borrowing base advance rate | 70.0% of Eligible Accounts | SEC EX-10.1 — Viemed / Whitney Bank loan agreement |
| Viemed/Whitney Bank: over-90-day AR still excluded | accounts receivable over 90 days from the invoice date giving rise to such account(s) | SEC EX-10.1 — Viemed / Whitney Bank loan agreement |
| OCC ARIF: cross-aging in most underwriting agreements | most underwriting agreements specify that all accounts of a single party will be designated ineligible collateral when any (or some percentage) of that customer’s receivables become ineligible. This is referred to as “cross-aging.” | OCC Comptroller’s Handbook: Accounts Receivable and Inventory Financing |
| OCC ARIF glossary: 10 percent rule | sometimes referred to as the “10 percent rule” since a common delinquency threshold is 10 percent | OCC Comptroller’s Handbook: Accounts Receivable and Inventory Financing |
Frequently asked questions
Does cross-aged AR count toward the borrowing base at term sheet?
No. At term sheet, cross-aged AR generally does not count toward the borrowing base. Unisys's Bank of America credit agreement (SEC EX-10.3) excludes “Cross Aged Accounts”: “Billed Accounts that are the obligations of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Billed Accounts owing by that Account Debtor are ineligible”.
What is cross-aging in an ABL Eligible Receivable definition?
The OCC Comptroller's Handbook on Asset-Based Lending states that “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.” Its glossary states: “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.”
What cross-aging thresholds do published sources list?
The OCC glossary states cross-aging is “Sometimes referred to as the "10 percent rule" because 10 percent of an individual party's accounts is a common delinquency threshold.” LenderAnalyzer states the trigger is “commonly 20 percent”. LegalClarity states: “Some agreements set the threshold higher, at 25% to 33%, particularly for lower-risk portfolios or industries where slower payment cycles are normal.” Glacier Lake Partners lists “cross-aged accounts (if a customer has more than 50% of their balance over 90 days, the entire balance becomes ineligible)”. Don Clarke states: “most commonly 25 percent, but in some agreements 50 percent”.
When does OCC treat an aged account as ineligible collateral?
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.” Its glossary states: “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.”
Can a borrowing-base agreement switch off cross-aging so cross-aged AR still counts?
Viemed’s Whitney Bank loan agreement (SEC EX-10.1) states: “The Eligible Accounts shall not be limited or reduced by any customer concentration or cross-aged accounts.” It defines a cross-aged account as “any account of Borrower where at least 20% of the outstanding balance of such account has aged in excess of 120 days.” The OCC Accounts Receivable and Inventory Financing handbook says “most underwriting agreements specify that all accounts of a single party will be designated ineligible collateral when any (or some percentage) of that customer’s receivables become ineligible.”
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