Your question is Covenants in a Loan Agreement. Take a moment with it on the right.
Talk me through your thinking if you like. When you're confident, submit your answer and I'll grade it like a real screen (7/10 or better passes).
Explain the importance of covenants in a loan agreement—what happens if a borrower breaches them?
Address maintenance versus incurrence covenants, lender protections, typical remedies, waiver considerations, and how a credit analyst should assess the breach. Use leverage, interest coverage, covenant headroom, liquidity, and recovery analysis where relevant.
