Overview
Loan Covenants Course Overview
In this Loan Covenants course, we will demonstrate how loan covenants are used in the lending process. We will start this course by defining covenants and discussing how they benefit both the lender and the borrower. We will then compare different covenants and discuss what a credit analyst should do in case of a covenant breach.
After that, we will discuss key financial covenant ratios such as total liabilities to equity ratio (debt-to-equity), debt service coverage ratio (DSCR), working capital ratio, and debt to EBITDA ratio. We will explain what these ratios are, how to calculate them, and how they are used in evaluating a company’s creditworthiness.
Finally, we will complete a case study where you need to build a covenant model in Excel. We will calculate a company’s key credit metrics based on the historical and forecast financial statements. We will compare these metrics to the covenants that are set for this business and are suitable for the loan.
Who should take this course?
This Loan Covenants course is perfect for any aspiring credit analyst working in insurance, underwriting, rating agencies, commercial lending, corporate credit analysis, and other areas of credit evaluation.Loan Covenants Learning Objectives
- Understand the key concepts of covenants in a loan agreement
- Explain different types of loan covenants
- Calculate key financial covenant metrics
- Use a financial model in Excel to model financial covenants
Prerequisite Skills
Recommended skills to have before taking this course.
- Excel
- Financial accounting
- Basic Math
Loan Covenants
Led by
Tim Vipond
Level 3
1h 16min
100% online and self-paced
Field of Study: Finance
Start LearningWhat You'll Learn
Lesson
Multimedia
Exams
Files
Common Covenant Metrics
Key Financial Covenant Ratios
Total Liabilities to Equity Ratio / Debt to Equity
Debt Service Coverage Ratio (DSCR)
Working Capital Ratio / Current Ratio
Debt to EBITDA Ratio
Interactive Exercise 2
Interest Coverage Ratio
Quick Ratio
Fixed Charge Coverage Ratio (FCCR)
Other Types of Financial Covenants
Reporting Covenants
Interactive Exercise 3
Midway Check-in
Loan Covenants Case Study
Financial Covenants Case Brief
Financial Covenants Case Study Note
Download Case Study Model
Financial Statements and Metrics Overview
Company Overall Financial Performance
Liquidity Metrics
Leverage Metrics
Funded Debt to EBITDA Ratio
Coverage Metrics Part 1
Coverage Metrics Part 2
Fixed Charge Coverage Ratio
Debt Service Coverage Ratio
Loan Overview
Loan Structure
Fixed Charge Coverage Ratio Adjustment
Loan Impact on Credit Metrics and Covenants
Loan Stress Test
Covenant Modeling Charts
Completed Model Review
Download the Completed Model
Conclusion
Qualified Assessment
This Course is Part of the Following Programs
Why stop here? Expand your skills and show your expertise with the professional certifications, specializations, and CPE credits you’re already on your way to earning.
Commercial Banking & Credit Analyst (CBCA®) Certification
- Skills Learned Financial Analysis, Credit Structuring, Risk Management
- Career Prep Commercial Banking, Credit Analyst, Private Lending
What Our Members Say
Loan Covenants
Excellent Content and Excellent Delivery venugopal rajamanuri
Loan Covenants
Interesting albeit too easy to pass! The excel teaching was really good, it would be better if it can be taught using Python! Tze Ann Lau
Clear Concepts
I understood the concepts very clearly. Arvind Kumar
One of the most practical courses for credit professionals!
This course is a must-do for credit professionals and commercial portfolio managers at lending institutions! Matthew K Davis
Frequently Asked Questions
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If you haven’t found your answer from our FAQ, please send us a message.
