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Set and track covenants
Covenants are the conditions a loan must keep. AcreedPulse measures each one against the live bank feed and tells you when one slips.
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The four covenants
- DSCR target
- Debt service cover: does monthly operating cash cover the loan payment? 1.25 means ₦1.25 of cash for every ₦1 due.
- Min cash balance (₦)
- The balance the business must keep in the account.
- Revenue floor (₦)
- The monthly income the business must not fall below.
- Leverage ceiling
- The most total debt the business may carry compared with what it earns.
Set them
Set covenants when you fund the loan, in the columns of a loan-book import, or on the loan’s page under Covenants with Set covenants or Edit. Leave a box empty to stop tracking that one, then press Save covenants. The suggested values are a starting point. Use your own policy.
Met, Watch and Breach
- Met
- Comfortably inside the limit.
- Watch
- Still inside, but close to the limit.
- Breach
- Outside the limit.
A change in a covenant’s status raises an alert. A breach is critical and is also emailed. A single month below a floor shows in the bell as a warning.