My banker said I will qualify for a business loan, but that they will impose financial covenants on me and that I will have to provide periodic financial statements. What does this mean?
A covenant is a stipulation of one type or another. Your lender may want to maintain a certain Loan-to-Value relationship or ensure that your receivables stay within specified parameters. These covenants should be discussed with you. They'll be calculated from the financial statements they are telling you will be needed periodically. If the covenants are not met, there should be some type of penalty. You really need to ask about this and understand it before you sign the agreement.
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A covenant is a stipulation of one type or another. Your lender may want to maintain a certain Loan-to-Value relationship or ensure that your receivables stay within specified parameters. These covenants should be discussed with you. They'll be calculated from the financial statements they are telling you will be needed periodically. If the covenants are not met, there should be some type of penalty. You really need to ask about this and understand it before you sign the agreement.
