Facing a covenant test?
Know where your covenants sit before the lender does.
A financed business carries covenants, and a breach is a default even when every repayment is on time. Before the next test date, we work each covenant in your facility agreement against your actual numbers and show how much headroom is left.
What a covenant breach actually triggers
- A covenant breach is a technical default, even when every repayment has been made on time
- A default can let the lender reprice the facility, ask for more security, or call the debt in
- Covenants are tested on the lender's schedule, and the certificate is due whether or not anyone has checked the numbers first
- The tightest covenant is rarely the one owners watch; it is usually buried in the facility agreement
- By the time a breach surfaces in the quarterly accounts, the room to fix it has often gone
None of these are answered by hoping the certificate ticks over. They are answered by working the covenants against the actual numbers before the test date. That is what this review does: the calculations handed to you ready for the compliance certificate you sign, and if a covenant is close to the line, you hear it while there is still time to move it. We do not audit, and we do not arrange credit.
You are paying for the answer, not for a particular answer.
Every covenant is worked from source figures: your financials, your management accounts, the definitions in your own facility agreement. We do not massage a ratio to show headroom that is not there, and we do not bury a breach. If a covenant has gone, the review says so plainly, with the levers that would move it, so you can act before the certificate is due.
The deliverable
Your covenants, worked and ready to sign off.
The financial covenants in your facility agreement, tested against your actual numbers the way a credit team would test them. You get each covenant worked, the headroom on every one, and a clear read on anything close to the line.
We prepare the figures; the compliance certificate is your representation to the lender and stays yours to sign. This is analysis, not audit, assurance or credit advice.
$1,250 · 5 business days
What you get
- Every financial covenant in your facility agreement identified and set out in plain terms
- Each covenant worked from your actual financials: leverage, interest cover, debt service cover, and the ratios your agreement sets
- How much headroom sits on each covenant, and which one bites first
- A written read on any covenant close to breaching, and the levers that move it
- The calculations set out ready for the compliance certificate you sign for the lender
- A debrief call, with the workbook inputs left editable for you and your advisors
How the review works
Send the agreement and the numbers
Your facility or loan agreement with the covenant schedule, your last financials and year-to-date management accounts. The covenants are defined in the agreement, so it is the document the work starts from.
We work each covenant
Every covenant tested against your actual figures, the headroom measured, and anything close to the line flagged. Nick scopes the matter and reviews the calculations.
The answer in 5 business days
The covenant position, a written read on anything tight, and the calculations ready for the certificate you sign. If a covenant has already gone, you hear that plainly, with what it takes to cure it.
Every period, not just once
Would this be better managed all year?
One review answers the next test date. If you would rather not run the covenant compliance yourself at all, there is a standing engagement that does it for you.
Covenant Management
The managed version of this work, run end to end all year: we are the bank’s point of contact, we set targets to keep you inside every covenant, we produce the reporting and coordinate your accountant, and we meet through the year on how you are tracking. Scoped and quoted in writing.
Want a rough read before you engage anyone? The free covenant check runs the common facility covenants on figures you type in. It will tell you whether a ratio is in range. It cannot read the definitions in your own agreement or the numbers behind them, which is the part this review does.
Covenant Compliance Review · $1,250 · 5 business days
Fixed fee, no contingency, GST excluded. If a covenant has already breached, we tell you that instead, with the levers that move it, and the fee is the same.
Common questions
No. The compliance certificate is signed by you or a director of the borrower, because it is your representation to the lender. We prepare the covenant calculations behind it and set them out so the certificate is straightforward to complete. We do not provide audit or assurance, and this review is not an audit.
Yes. The Debt Capacity Assessment models a new facility you are thinking about taking, to see whether the numbers carry it. This tests the covenants on a facility you already have, on the lender's schedule, so a breach does not catch you out. Buyers who have just closed a financed acquisition often want this for the first test date.
You hear it straight, with how tight it is and the levers that move it: an equity injection, a repayment, a reclassification the lender will accept, or an early conversation with the lender before the certificate is due. We do not hide a breach and we do not massage the figures to bury one. You are paying for the answer, not for a particular answer.
Not as part of this. The read and the calculations are yours to take to the lender, your accountant or your broker. Negotiating a waiver or varying a facility with a lender is finance broking, handled by The Lending Lab Pty Ltd, a separate business, with any referral relationship disclosed in writing.
Yes, and for most financed owners that is the better fit. Covenant Management is the standing engagement that runs the compliance for you all year: we are the bank's point of contact, we produce the reporting, we coordinate your accountant, and we keep you inside every covenant. This one-off review is the single test-date version, so if you already know you want it managed all year, start there instead.