The First 90 Days After ABL Closing — A CFO Playbook for Borrowing Base, Treasury, Reporting, and the First Field Exam

Closing the ABL facility is the easy part. The first 90 days under the new credit agreement are when borrowers either build a working operating rhythm with the lender or generate avoidable friction that follows them through the life of the deal. The first borrowing base certificate gets graded, treasury operations have to be rewired around the lender's cash management framework, monthly reporting starts on a clock, and the first interim field exam is typically scheduled within the window. Most operational disputes that surface in year two trace back to habits set — or never set — in the first ninety days.

Over four decades in asset-based lending — as a lender, as founder of ABLC, as author of Asset Based Lending Disciplines, and as a trainer of more than 5,000 ABL professionals at GE Capital, JP Morgan Chase, Lloyds, and Barclays — I have watched the same CFO mistakes appear and reappear in the first quarter under a new facility. This article is the borrower-facing playbook for the post-closing window: what to do, what to schedule, what to expect, and where to invest CFO and controller time so the lender relationship starts on the right footing. This article is educational and is not legal, tax, accounting, or investment advice.

Day One: What Actually Funded, and What Did Not

The first task on funding day is reconciling what the lender actually advanced against what the borrowing base, the term sheet, and the closing settlement statement said the lender would advance. Initial fundings frequently include holdbacks for items the lender wants to verify post-closing: a final reserve for an open landlord waiver, a short hold for a pending tax lien release, a reserve for a customer credit balance the field exam flagged. The borrower's controller should reconcile the wire to the closing settlement statement line by line on day one, and identify any holdback, reserve, or adjustment for what it is.

If the structure includes a stretch piece on top of the formula availability, an overadvance, or a seasonal accommodation, the CFO should also have a paper file with the exact terms — duration, repayment trigger, fee, and conditions to extend. These items disappear into a closing binder by week two and become controversial in month nine if they are not pulled forward and documented now.

The First Borrowing Base Certificate Is Graded

The first post-closing borrowing base certificate is the most important reporting submission in the life of the facility. It is the first document the lender's portfolio team will compare to the closing-day collateral picture, and it sets the tone for how the relationship is going to operate. Sloppy first certificates produce extra questions on every subsequent certificate. Clean ones build trust the borrower will draw on for years.

The borrower should treat the first certificate as if it were a closing diligence item, not a routine monthly file. Specifically:

• Reconcile to the general ledger. Every total on the borrowing base — gross AR, ineligibles, eligible AR, inventory by category, reserves — must reconcile to the trial balance at the same as-of date. Differences must be explained on the face of the certificate or in an accompanying schedule.
• Apply the eligibility tests exactly as defined. The credit agreement defines eligible accounts, eligible inventory, and the reserve framework. The first certificate is the borrower's chance to demonstrate the eligibility tests are being applied as written, with no shortcuts. We walk through what this looks like in our guide to how to read an ABL borrowing base certificate line by line.
• Get the reserve math right. Concentration reserves, dilution reserves, priority payables reserves, and any deal-specific reserves are reapplied on every certificate. Setting up the calculation in a defensible workbook now is far less work than rebuilding it under pressure in month four.
• Sign the rep. The CFO signature on the certificate is a rep that every line meets the eligibility test as of the certificate date. The discipline of running the certificate internally before submission — and only signing what the CFO is willing to defend in a field exam — is the same discipline we describe in our guide to DSO, DIO, and working capital velocity.

Treasury Transition: Lockbox, Cash Management, and the New Daily Cycle

The second large operational change in the first 90 days is treasury. Depending on the facility structure, the borrower will be operating under either springing or full cash dominion from day one. Either way, the day-to-day mechanics of cash movement, vendor payment, payroll funding, and intercompany transfer change.

The full mechanics of cash dominion are covered in our guide to cash dominion structures in ABL. In the first 90 days, the key tasks are:

• Customer remit-to changes. Customers must be notified of the new lockbox address and bank routing where applicable. ACH and wire-paying customers need updated bank details. Stragglers paying to the old account create lockbox exceptions, sweep delays, and avoidable reconciliation work.
• Vendor payment routing. If the lender is on a daily advance model, the borrower needs to internalize that vendor checks and ACH originations are funded from advance proceeds, not from bank balance. Treasury staff need to learn the new daily cycle and the cutoff times.
• Payroll funding. Payroll is the highest-stakes funding event each week. The borrower should confirm with the lender how payroll funding will be advanced, the cutoff timing on payroll day, and the contingency for any operational issue with the advance.
• Intercompany and cross-entity transfers. If the credit agreement restricts intercompany transfers, distributions, or upstream payments to a parent or sister entity, finance needs to internalize those limits before they show up in a compliance certificate question.

The First Interim Field Exam

Most ABL credit agreements require at least one full field exam at or near closing, plus one or more interim exams within the first six to twelve months — and frequently the first interim exam is in the first 90 days. The mechanics, scope, and borrower preparation for a field exam are covered in our guides to the field examination process and how to prepare for your first field exam. The relevant point for the first 90 days is that the borrower should expect a field exam in the window, plan calendar time for it, and pre-stage the workpapers the field examiner will request.

Field exam findings — eligibility adjustments, dilution recalculations, control-environment comments — are the most common driver of post-closing availability changes. A clean first interim exam is the single most valuable trust-builder a new borrower can produce. A bad first exam, by contrast, tightens the relationship for years.

Covenant Compliance and the First Compliance Certificate

The credit agreement defines the financial covenant package — most commonly a springing fixed charge coverage ratio test triggered below an availability threshold, sometimes a maximum capex or minimum EBITDA covenant in stretched structures, plus an array of negative covenants on distributions, debt, liens, asset sales, and acquisitions. The first compliance certificate, typically delivered with the first monthly or quarterly financials, requires the CFO to certify covenant compliance.

Three points matter in the first 90 days:

• Build the compliance workbook. The same way the borrowing base needs a defensible workbook, the covenant package needs one. Each defined term — fixed charges, EBITDA, capex, permitted indebtedness — needs to be calculated according to the credit agreement's definitions, not GAAP shortcuts.
• Watch the availability covenant trigger. Most modern ABL facilities use availability triggers for the springing financial covenant and for cash dominion. The CFO should know exactly where availability is sitting and how close it is to each trigger threshold at any time.
• Communicate before a breach. If a covenant is going to be tight or breached, the borrower should be talking to the agent about it before the certificate is due, not after. The mechanics of how to handle a covenant breach when it does happen are in our guide to ABL covenant breach, forbearance, and amendments.

Reporting Cadence and Audit Upgrade Path

The credit agreement codifies the reporting cadence: typically monthly internal financials and borrowing base certificate, quarterly internally prepared statements with compliance certificate, and annual audited financial statements within 90 to 120 days of fiscal year-end. We cover the audited-versus-reviewed-versus-compiled framework and what it means for the lender relationship in our CPA assurance level guide.

If the facility includes an audit-upgrade covenant for a borrower that closed on reviewed or compiled statements, the engagement letter with the CPA firm should be signed inside the first 90 days. The audit takes calendar time, and the credit agreement deadline does not move. Borrowers that wait three months to engage the firm routinely miss the upgrade deadline and have to request an extension — an avoidable amendment in the first year.

The Relationship Architecture: Who Talks to Whom

The lender's organization is layered: a relationship manager, a portfolio manager, a field examiner, an inventory appraiser, a credit officer, an asset manager, and a closing/loan operations team. The borrower's CFO should know who plays what role and what topics route to which person. In the first 90 days the CFO should:

• Schedule a 30-day post-closing call with the relationship manager and portfolio manager to confirm operating rhythm — certificate timing, reporting day, draw mechanics, escalation paths.
• Build the routing map. Borrowing base questions and certificate exceptions route to portfolio. Field exam scope and timing route to the asset manager. Strategic questions about line size, structure, or amendment route to the relationship manager. Lockbox or operational treasury items route to the lender's cash management team.
• Set the cadence. Most facilities settle into a monthly portfolio call, quarterly senior review, and ad hoc strategic touches. Putting the calendar in place in the first 60 days saves friction in months six and twelve.

How DCE Advises Through the Post-Closing Window

Don Clarke Enterprises is an independent loan-placement consulting firm. We do not lend, underwrite, fund, approve, or guarantee credit. What we do is advise borrowers and CFOs through deal preparation, lender selection and introduction, term sheet review, and — for borrowers who want continuity — the post-closing onboarding window. The first 90 days are a continuation of the deal, not a separate exercise: the choices made in the term sheet and credit agreement now become operational reality. We help borrowers stage the first borrowing base, prepare for the first interim field exam, build the covenant compliance workbook, and set the cadence with the lender's portfolio team. The matching problem is the same one we describe across our work on the ABL credit package and on choosing the right ABL lender: align how the borrower runs the facility with how the lender expects to operate it.

Don Clarke is a member of the Secured Finance Network Hall of Fame (2021) and a recipient of SFNet's Lifetime Achievement Award. He authored Asset Based Lending Disciplines, the first textbook in the field, and has trained more than 5,000 ABL professionals at GE Capital, JP Morgan Chase, Lloyds, and Barclays. That depth on the lender side is the lens we bring to the post-closing window.