Intercreditor Lien Carveouts Supporting Supply Chain Finance Borrowing Base Expansion
Intercreditor lien carveouts expand asset-based availability by isolating supplier-financed collateral through structured subordination and reserve caps.
Warehouse Waiver Agreement
Meaning
Contractual releases signed by third party logistics providers protect a lender’s access to collateral stored in leased facilities. A warehouse waiver agreement prevents the warehouse operator from asserting a lien over the borrower’s inventory for unpaid storage fees. This ensures that the secured lender can reclaim and sell the inventory if the borrower defaults on its loan.
It is a critical requirement in asset based lending programs where inventory is a major component of the borrowing base.
Collateral Access
Lenders require this document before they will advance funds against inventory stored at a third party warehouse. The warehouse waiver agreement allows the lender’s agents to enter the premises to inspect or remove the pledged goods. This access is maintained even if the borrower faces insolvency or eviction.
Legal Protection
The warehouse operator agrees to subordinate or waive their statutory lien rights in favor of the lender. This waiver ensures that the lender has the first right to the inventory in a liquidation scenario. It prevents the operator from locking the doors and holding the goods hostage for unpaid rent.
Dispute Resolution
Clear procedures are established for resolving unpaid storage charges before the lender removes the collateral. The lender may agree to pay the current monthly storage fees while the inventory is being liquidated. This payment ensures the cooperation of the warehouse operator during a default.