Cross-ageing

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-06

// THE SHORT ANSWER

Cross-ageing is a rule in receivables finance that makes all of one debtor's invoices ineligible once a set share of them is overdue, not only the overdue ones. If a customer owes US$500,000 and US$150,000 of it is more than 90 days past due, a 25% cross-ageing rule removes the whole US$500,000 from the borrowing base. The reasoning is that a customer paying some invoices late may not pay the rest, and the lender would rather find out before it has advanced against them.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.