Covenants & lender reporting
Greywood CPA keeps businesses on track with what their loan agreement requires after closing: covenant calculations, compliance certificates, borrowing base reports and annual financial statements delivered on time. We are a licensed CPA firm working nationwide, at a fixed fee.
Most loan agreements define their covenants in their own words, so "EBITDA" or "debt service coverage" in your agreement may not match the standard formula. We calculate covenants exactly as your agreement defines them, quarterly or annually, and tell you early if one is at risk so you can talk to your lender before a breach.
Last reviewed: November 2026
| Covenant | What it tests |
|---|---|
| Debt service coverage ratio (DSCR) | Cash flow available to cover principal and interest |
| Fixed charge coverage | Cash flow covering debt payments, rent and other fixed charges |
| Funded debt to EBITDA | Leverage |
| Minimum net worth or tangible net worth | Equity cushion |
| Current ratio or working capital | Liquidity |
| Limits on distributions or capital spending | Cash leaving the business |
Two businesses with the same results can pass or fail the same covenant depending on how their agreements define it: which add-backs are allowed, whether distributions reduce cash flow, whether the test is trailing twelve months or year-to-date. We build the calculation from your agreement's definitions and keep a written schedule your lender can follow.
A covenant breach doesn't have to become a default. Lenders generally prefer to hear about a problem early and can often grant a waiver or amend the covenant. We project covenants ahead of the test date so you know in time, and help you prepare the numbers and explanation for that conversation.
We read your loan agreement and list every deliverable and covenant.
Scope and one fixed fee.
Covenant schedules built to your agreement's definitions.
Calculations, certificate support and a heads-up if anything is close.
Cash flow available for debt service divided by required principal and interest payments over the same period. Lenders commonly require 1.20x or higher, but your loan agreement sets the exact definition and minimum.
It is usually an event of default under the agreement, but lenders often grant a waiver or amendment, especially when told early. Reporting it accurately and promptly matters.
Usually an officer of the borrower. We prepare the calculations and support behind it.
Loan agreements define their own terms, including which add-backs, distributions and periods count. The agreement's definition is the one that applies.
We quote one fixed fee in writing per test period or per year, based on the covenants and deliverables in your agreement.
Send us your loan agreement. A senior CPA will send a fixed-fee proposal within 1–3 business days.