{"ok":true,"canonical_url":"https://dealroom.so/glossary/covenant-compliance-check","api_url":"https://dealroom.so/api/public/glossary/covenant-compliance-check","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"covenant-compliance-check","term":"Covenant compliance check","group":"Doing the deal","definition":"This is when your lender regularly reviews your business's financial performance to ensure you're meeting the specific conditions outlined in your loan agreement. It's how the bank makes sure you're keeping your promises.","what_it_means":"Your SBA loan will include covenants, such as maintaining certain debt service coverage ratios or liquidity levels. The lender will conduct regular covenant compliance checks. Understand these requirements upfront and proactively manage your business to stay within them, as breaches can trigger a loan default.","url":"https://dealroom.so/glossary/covenant-compliance-check","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"},{"slug":"compliance","term":"Compliance","url":"https://dealroom.so/glossary/compliance"}],"related_questions":[{"question":"Does the SBA check my personal credit score directly when I apply?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-check-my-personal-credit-score-directly-when-i-apply"},{"question":"What kind of records does the SBA check about my personal background?","url":"https://dealroom.so/sba-loans/basics/what-kind-of-records-does-the-sba-check-about-my-personal-background"},{"question":"Does the SBA check my personal background, like criminal history, for a loan?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-check-my-personal-background-like-criminal-history-for-a-loan"},{"question":"How do I check if a specific franchise system is eligible for SBA 7(a) financing?","url":"https://dealroom.so/sba-7a/questions/how-do-i-check-if-a-specific-franchise-system-is-eligible-for-sba-7-a-financing"},{"question":"Does the SBA check for past defaults on federal debts, like student loans or prior SBA loans?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-check-for-past-defaults-on-federal-debts-like-student-loans-or-prior-sba-loan"},{"question":"How does SBA Form 1919 ensure borrower eligibility compliance for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-sba-form-1919-ensure-borrower-eligibility-compliance-for-a-7-a-loan"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Covenant compliance check","url":"https://dealroom.so/glossary/covenant-compliance-check","source_type":"DealRoom Data"}}