{"ok":true,"canonical_url":"https://dealroom.so/glossary/loan-covenants","api_url":"https://dealroom.so/api/public/glossary/loan-covenants","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":"loan-covenants","term":"Loan Covenants","group":"The loan itself","definition":"These are conditions in your loan agreement that you must continue to meet throughout the loan's term. They protect the lender by ensuring the business remains financially sound.","what_it_means":"Your SBA loan agreement will include covenants, such as maintaining specific debt service coverage ratios or providing regular financial statements. Breaching a covenant, even if you're making payments, can put you in default. Understand these requirements thoroughly and ensure your financial management practices can consistently meet them.","url":"https://dealroom.so/glossary/loan-covenants","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"}],"related":[{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"},{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"financial-statements","term":"Financial statements","url":"https://dealroom.so/glossary/financial-statements"},{"slug":"compliance","term":"Compliance","url":"https://dealroom.so/glossary/compliance"}],"related_questions":[{"question":"How does a lender ensure the loan covenants in the authorization are accurately reflected in the loan documents?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-ensure-the-loan-covenants-in-the-authorization-are-accurately-reflected-"},{"question":"What specific financial covenants or conditions must be included in a seller note on full standby for a 7(a) acquisition loan?","url":"https://dealroom.so/for-lenders/questions/what-specific-financial-covenants-or-conditions-must-be-included-in-a-seller-note-on-full-"},{"question":"Does an SBA loan have better terms than a regular bank loan?","url":"https://dealroom.so/sba-loans/basics/does-an-sba-loan-have-better-terms-than-a-regular-bank-loan"},{"question":"What is the minimum loan amount for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-minimum-loan-amount-for-an-sba-7-a-loan"},{"question":"What is the maximum loan amount for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-maximum-loan-amount-for-an-sba-7-a-loan"},{"question":"Is there a typical average loan size for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/is-there-a-typical-average-loan-size-for-an-sba-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 — Loan Covenants","url":"https://dealroom.so/glossary/loan-covenants","source_type":"DealRoom Data"}}