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Gibraltar's working capital Line of Credit is an accounts receivable based product that works like a bank loan. It is an "interest only" type of loan in that the principal balance can remain open indefinitely.

Gibraltar captures invoicing and collection information and provides this information daily to its clients in the form illustrated below. The Line of Credit is usually in the amount of 80% of total receivable balances, but can vary between 50% to 90%. For borrowing purposes, all receivables are treated in bulk rather than individually which makes for easy administration for the client. However, for credit evaluations, collection purposes and for various types of portfolio analyses, we offer our clients the ability to view the invoices individually or grouped by customer.

1. ACME ends the day with $300,000 of eligible receivables
   (Line A - Line B - Line C = Line D).

2. ACME can borrow up to $240,000 (Line D x 80% = Line F).

3. ACME owes $205,000 (Line G - Line H - Line I = Line J = $205,000).

4. ACME is eligible to draw any part of $35,000 (Line F - Line J = $35,000).

5. ACME decides to borrow no money.

   If on the next day $10,000 of invoices were generated and $5,000 of collections were received, the status sheet would look as follows:

   DAILY STATUS SHEET as of February 15
   ACME, INC.
   A)	Gross receivable balance	316,000 (311,000+10,000-5,000)
   B)	Less A/R over 90 days	(8,750)
   C)	Other adjustments	(2,250)
   D)	= Net eligible A/R	305,000
   E)	X Advance rate	80%
   F)	= Total available to borrow	244,000
   ======================================
   G)	Loan balance	205,000
   H)	Less today's collections	(5,000)
   I)	Other adjustments	-
   J)	= Present loan balance	200,000
   ======================================
   K)	Available to borrow (line f-j)	44,000

6. ACME begins the day with $311,000 of receivables, adds $10,000 of new invoices and subtracts $5,000 of collections. The new receivable balance equals $316,000 (Line A).

7. Subtract accounts over 90 days old and subtract adjustments to get $305,000 net eligible A/R (Line A - Line B - Line C = Line D).

8. ACME can borrow up to $244,000 (Line D x 80% = Line F).

9. ACME owes $200,000 (Line G - Line H - Line I = Line J = $200,000).

10. ACME is eligible to draw any part of $44,000 (Line F - Line J = $44,000).

• Receivables increase with new invoices and decrease with collections.
• The loan balance increases with new borrowing requests and reduces with collections.
• The client can always borrow up to 80% of adjusted receivables.