05/27/2026
Before signing off on your loan did you check the loan covenants?
Loan covenants are the rules buried within your loan agreement that could result in you defaulting on your loan, even if you are making your payments on time.
Common covenants include maintaining a minimum cash balance, hitting a target debt service coverage ratio, or staying under a leverage cap. Miss one and the lender can demand the full balance immediately.
Before you sign off on your loan make sure you ask your broker about the covenants you are agreeing to and what happens if you miss one.
