Covenant
Conditions attached to a loan, such as a minimum equity ratio or a maximum debt-to-EBITDA, that the company must keep to for the whole term. Breaching one can make the loan repayable immediately.
Why it matters
Read them before signing, because a covenant breach in a bad year can turn a manageable loan into an acute crisis.
Want to know which funding your company can actually get?
Try the Funding Finder