Professional Services. Warehouse receipt finance setup and lender placement with collateral management agreements. Prepared September 2025.
Warehouse Receipt Finance with Collateral Management Agreements
Sitting on stock and starved for cash is a bad combo. We turn eligible inventory into working capital by putting title control, insurance, and daily reporting around it, then placing the line with lenders who fund against receipts. Clean structure in, money out, goods move on time.
Who it suits
Commodity traders, processors, importers, exporters with recurring flows and standard grades.
Typical size
USD 5m to 150m programs. Upsize as data and controls prove out.
Collateral
Inventory in bonded or controlled warehouses with enforceable title and valid insurance.
What This Financing Really Is
A revolving line secured by stock that a collateral manager controls. The warehouse issues receipts, a tripartite or CMA locks custody, lenders advance against net liquid value, and collections sweep back through a cash waterfall. You borrow, sell, repay, redraw.
Why lenders like it
They have control. Gate checks, stock counts, and named release conditions reduce games and cut loss risk.
Why you like it
Lower cash stuck in stock. Faster turns. Funding grows with inventory and sales, not slide decks.
Advance Rates And Eligibility
| Collateral | Typical Advance | Eligibility | Key Reserves |
|---|---|---|---|
| Metals in LME or ARA style sites | 60% to 80% of NLV | Recognized brands, assay or warrant, daily marks | Price, FX, concentration |
| Agri bulks in bonded silos | 55% to 75% | Moisture and grade certs, fumigation, storage terms | Shrink, quality, seasonality |
| Refined fuels and chemicals | 50% to 70% | Tankage agreements, product specs, pipeline tickets | Volatility, contamination, route risk |
| Packaged industrials | 50% to 65% | Barcodes, batch tracking, insured storage | Slow mover reserve, obsolescence |
NLV means market value minus haircut. Final rates depend on grade, custody, liquidity, route, and jurisdiction.
Pricing And Core Terms
| Item | Typical Range | What moves it |
|---|---|---|
| Interest margin | SOFR plus 500 to 900 bps | Commodity volatility, custody quality, lender mix |
| Arrangement fee | 1.0% to 2.0% of facility | Complexity, syndication, speed |
| Undrawn fee | 0.50% to 1.50% on committed line | Commitment size and usage |
| Monitoring costs | Collateral manager and field exams | Site count, frequency, scope |
| Tenor | 12 to 36 months | Renewable based on performance |
| Lead time | 3 to 8 weeks | Faster with clean data and ready CMAs |
What A Collateral Management Agreement Covers
Custody and access
Gate control, dual release, sample rules, off-take conditions, named lots, and no release without lender consent.
Reporting
Daily stock and movement reports, variance flags, count schedules, and exception logs that actually get read.
Insurance
All risks and named insureds. Loss payee endorsements and policy assignment where the lender requires it.
Legal hooks
Perfected security interest. Tripartite letters. Pledge or charge compliant with local law. UCC filing or local equivalent.
How We Get You Funded
- Scope and data. Map stock by site, grade, turnover, and sales routes. Pull price history and liquidity.
- Controls. Draft CMA or tripartite, confirm warehouse capability, set insurance and reporting format.
- Borrowing base. Define eligibility, haircuts, reserves, and BBC template. Keep rules tight and simple.
- Lender placement. Term sheet with banks or credit funds that lend against your product and custody.
- Docs and go live. Security, accounts, CMA execution, data feeds. First draw after conditions are met.
Documents We Need To Start
Company
KYC, ownership chart, audited financials, management accounts, bank statements.
Inventory
Stock by site and grade, turnover history, purchase and sales contracts, Incoterms.
Custody
Warehouse agreements, sample receipts, site photos or maps, collateral manager profile.
Insurance
Policies, endorsements, claims history, and proposed loss payee wording.
Common Pitfalls And How We Avoid Them
- Title gaps. We fix custody terms and get the right legal opinions before money moves.
- Slow movers. Haircuts and reserves reflect reality so the BBC does not blow up at rollover.
- Phantom stock. Scan, seal, and reconcile. Surprise counts are part of life here.
- Route shocks. Approved carriers and routes, plus buffer in ETAs when risk is real.
Frequently Asked Questions
Do we need a collateral manager
Yes if you want higher advance rates and real appetite. Lenders pay for control. A proper CMA is the control.
Can we fund in transit
Often yes with clean negotiable bills of lading or accepted eB/L and a defined route. Advance rates are lower.
How fast can we close
Three to eight weeks is common. Sites that already run CMAs can be quicker.
Can this sit next to our bank LC line
Yes with an intercreditor and clear waterfalls. We structure terms so the lines do not trip each other.
Set Up Warehouse Receipt Finance
Send your stock reports and warehouse details. We will shape the borrowing base, CMA, and lender list so you can draw with confidence.
Start NowDisclaimer. FG Capital Advisors provides advisory and arrangement services. Terms are set by lenders after diligence. No leased instruments. Final pricing and advance rates depend on asset quality, custody, insurance, and jurisdiction.
