Advance rate
The advance rate is the share of the collateral’s value, or of the equipment cost, that a lender will lend. A 70% advance rate on $10M of GPU servers means a $7M loan and $3M of borrower equity.
Same advance rate, two prices
| Quoted price for one B300 server | $550,000 |
| Same server, other quote | $460,000 |
| Loan at 80% of the higher quote | $440,000 |
| Loan as a share of the lower price | 96% |
An 80% advance on an inflated invoice is close to a 100% advance on what the server is worth.
Quotes from our appraisals page, which reports the same B300 server quoted at both prices.
How it works
A percentage applied to a base. The base is usually the purchase price on the invoice, sometimes an appraised value. The percentage moves with the credit behind the loan: who pays the operator, for how long, and how much equity sits below the lender.
Most GPU loans advance 50-80% of cost. Published ranges anchor on 70% (GPU loans). Our Neocloud Credit Score maps the advance to the borrower’s tier, from up to 75-80% for an AC-1 credit backed by an investment-grade offtaker to nothing against an AC-5 contract alone.
What lenders check
It decides how much equity absorbs losses first. At 70%, the hardware can lose 30% of its value before the loan is under water, before counting amortization.
GPU prices fall fast. A B300 goes from about 80% of list price to 52-64% in a year in our conservative residual value bands, so the advance has to sit below where the collateral will be at the first refinancing or default date.
Check the base before the percentage. An appraisal against realized resale prices stops a lender advancing against a markup.
Discuss a transaction
Send us the equipment list and the loan or lease you have in mind. We will come back with an indication and the questions we would need answered.
Prefer email? hello@amcompute.com