Eligible receivables

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

Eligible receivables are the invoices a financier will lend against once its rules have excluded the rest — typically invoices past a stated age, amounts owed by related companies, debtors who are also suppliers, disputed or foreign debts the financier will not take, and any share of one customer above a set limit. The advance rate applies only to what remains, so the funding a ledger supports is often well below its face value. The eligibility rules are the financier's reading of which debts will actually turn into cash, and a business should read them before it plans around the headline limit.

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.