UK Accounting Glossary
A Loan Covenant is an agreement made by the company with a lender of long-term finance, protecting the loan by imposing conditions on the company, usually to restrict further borrowing.
A loan covenant is a condition in a commercial loan or bond issue that requires the borrower to fulfil certain conditions or which forbids the borrower from undertaking certain actions, or which possibly restricts certain activities to circumstances when other conditions are met.
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This glossary post was last updated: 23rd December 2018.