What Happens in Case of Failture to Fulfill Loan Covenants?

When an entity makes a loan, there are loan covenants that the borrower must withstand. These covenants are designed to ensure that the borrower will withstand his long-term commitments to the lending party. Eitan Eldar explains that the goal in these covenants is to maintain a healthy financial behavior, as reflected in the financial reports. The … Read more What Happens in Case of Failture to Fulfill Loan Covenants?

What Covenants the Bank Requires in a Loan?

When a businessman wants to become the controlling shareholder of a public company to acquire 51 percent control of it, he usually asks for a loan from the bank. Eitan Eldar says that the amount of the loan depends on the equity of the purchaser. In this situation, the bank would like covenants. These covenants … Read more What Covenants the Bank Requires in a Loan?