Business Finance Lending Covenants
If you have outstanding business finance facilities with a lender then you will also have lender covenants that will need to be met in order to maintain the financing.
With most banks and institutional lenders, business financing is provided on demand. So if any of the financing covenants are not being met, the lender has the right to call the loans at any time and for basically any reason which will require the borrower to repay the amount borrowed in full.
Covenants can be for a number of things, but the most common have to do with balance sheet rations and cash flow ratios that the lender deems important to be maintained in order for the business to properly manage outstanding debt.
