Advance rate
The percentage of a specified eligible value that may support borrowing.
How it works
The advance rate is the percentage of an eligible value that a lender will lend against. A 70% advance rate on 100 of eligible value supports 70 of debt. The remaining percentage is the cushion that protects the lender if the value falls.
In GPU and data centre deals
In GPU loans, advance rates apply to the cost or depreciated value of the hardware, or to the present value of contracted cash flows. Rates are higher where the cash flow comes from investment-grade customers and lower where the lender relies more on the hardware. In data centre ABS, the advance rate is effectively the leverage the rating agency allows for each class of notes.
What gets negotiated
- The value the rate applies to: cost, depreciated value or contract value
- Different rates for investment-grade and other customers
- Step-downs in the rate as the GPUs age
- Who sets the value, and how disputes are resolved
Why the distinction matters
Apply the percentage only after eligibility exclusions and valuation adjustments. An advance rate on equipment cost differs from one applied to discounted contract cash flows.
Read the structure
From contract eligibility to concentration limits, valuation and a funding shortfall.
GPU borrowing bases: what actually supports availability ↗In the filed deals
One on-chain GPU facility reported in 2025 cited an advance rate of up to 70%.
For in-house counsel
Advance rate in the filed documents
Where the term turns up in filed contracts and what is market, for the lender’s or the borrower’s side. Previews are open; the full text is free with InfraCompute Weekly.
- What’s market: Advance rate in GPU loansWhat percentage of GPU cost will lenders advance?
- Clause library: Loan sizing: advance rate and sizing DSCREach draw is the lower of a percentage of cost and the amount the contract cash flows can support at a sizing DSCR. The filed…
- Financing clause libraryCash traps, coverage ratios, cures and step-in, from the filed deals.
- The legal desk for in-house counselContract library, issues lists, checklists and English law notes.
Related terms
Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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