A stated facility limit sitting below the sum of lending values

The March sum of lending values is $3,277,251.25. The stated facility limit is $2,400,000. The limit sits $877,251.25 below the collateral the schedule recognises. Stated capacity — the most the facility will currently extend — is the minimum of those two dollar amounts, which is $2,400,000.

The drawn opening balance is $1,847,220. Undrawn capacity against the limit is 2,400,000 − 1,847,220 = $552,780. That is the residual of the limit, not the residual of the collateral. The $877,251.25 of lending value above the limit is real, and it does no work on the draw. It is headroom of a different kind: it is why a fall in lending value can travel some distance before stated capacity even twitches.

Two ceilings, one binding. While lending value stays above $2,400,000, every change in a row's product changes the blend and changes the unused surplus, and changes stated capacity by zero. Lesson 14 will zero Calder and leave the $2,400,000 untouched. Lesson 18 will add a high-advance holding and raise the blend, and leave the $2,400,000 untouched. The limit is the binding constraint on this book.

The identity is small enough to keep in one line. Stated capacity equals the lesser of the facility limit and the sum of lending values. Drawn is a recorded balance. Undrawn is the limit minus the balance, so long as the limit is the lesser figure. Swap the inequality and undrawn becomes lending value minus the balance instead. The March book does not swap it.

A surplus of lending value above the limit is not extra line. It is a buffer in front of the line you already have.