Covenant Compliance Tracker
The tracker layout, the common covenants with their formulas, and the early-warning thresholds that catch a breach before the bank does.
The common covenants
| Covenant | Formula | Typical limit |
|---|---|---|
| DSCR | EBITDA / debt service | min ~1.25x |
| Leverage | Total debt / EBITDA | max ~3.0x |
| Fixed-charge coverage | (EBITDA − capex) / fixed charges | min ~1.10x |
| Current ratio | Current assets / current liabilities | min ~1.25 |
| Minimum EBITDA | Trailing-12-month EBITDA | floor set in the agreement |
The tracker layout
For each covenant, track every month: the limit, your actual, the headroom (buffer), and the three-month trend. Color it green/amber/red so a tightening covenant is obvious at a glance. To run this without building the sheet, the Covenant Compliance Monitor applies the same layout and thresholds in your browser.
Early-warning thresholds
- Amber when you're within 15% of a limit
- Red when you're within 5%, or the trend will breach within two quarters
- Forecast each covenant forward in your model — trailing numbers warn you too late
If you're heading for a breach
- Confirm the math and the exact measurement date
- Model the cure (EBITDA, debt paydown, distributions held)
- Talk to the lender early — ask for a waiver or amendment before the date
- Never let the bank find it first
A breach you flag in advance is a conversation. A breach the bank finds is a problem. Want this monitored and reported for you? Book an intro call.