LexisNexis Practical Guidance®
Straightforward guidance across a range of topics

Common financial covenants

This guidance note explains:

  • the most common financial covenants used in general corporate lending, namely:
    • minimum net worth or tangible net worth;
    • gearing ratio;
    • leverage ratio or debt to equity ratio;
    • cashflow cover ratio;
    • interest cover ratio; and
    • loan to value ratio;
  • a typical starting point for each of those financial covenants; and
  • some items which could be included or excluded from definitions within financial covenants.

See Common financial covenants.