Parameters
The Additional Borrow Capacity Calculations makes use of the following parameters:
Tolerance Percentage: The Tolerance Percentage refers to the maximum percentage change in the Shock Factors score, set according to a curve where lower Credit Scores output lower Tolerance Percentages. Borrowers with higher Credit Scores justify higher Tolerance Percentages as their overall creditworthiness remains relatively strong in the event of a shock.
Discount Tier: A discount is applied to the Tolerance Percentage defined above by the level of Borrower Current Assets available to service Debt.
Available Current Assets Ratio is calculated as follows:
Available Current Assets Ratio = (Current Assets - (Trading Margin + Collateral)) / Borrower Unsecured Liabilities The appropriate Discount Tier is determined by the following table:
Adjusted Tolerance Percentage: The Adjusted Tolerance Percentage is defined as the Tolerance Percentage * (1 - Discount Tier)
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