promises to reach certain financial targets The bank requested several financial covenants before granting the company the loan.
- Carlson Inc. remains comfortably within all financial covenants, which primarily relate to interest cover, fixed charge cover and net gearing.
- If the borrower breaches (=does not fulfill or comply with) the financial covenants, the bank can request that the loan be repaid immediately.
- The company must have a turnover of at least $5 million every year in order to meet the financial covenant given to the bank.
- financial covenants are the promises by the management of the borrowing firm to adhere to certain limits in the firm's operations.