Glossary · The loan itself
In short
Covenants are promises or conditions in your loan agreement that you must uphold throughout the loan term. They can be financial, like maintaining a certain debt service coverage ratio, or operational, like providing financial statements regularly.
Ignoring covenants can lead to loan default, even if you're making payments. Understand every covenant in your loan agreement. Negotiate any you find restrictive during the commitment letter phase; once signed, they are legally binding.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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