Commercial Lending: Loan Agreements and Covenants
Do you know the difference between an affirmative covenant and a negative covenant? What is the concept of constructive forbearance? Commercial lenders actively use loan agreements in almost all lending situations, ever since digital document systems eliminated the time-consuming effort to create loan document from scratch of from manual templates. Unfortunately, this automation has led to less understanding of the content of loan agreements and the “art” of crafting financial covenants. This program covers the basics of loan agreements, starting with the typical structure of the document and the roles of financial and non-financial covenants (some covenants achieve more than one objective). Together with carful loan structuring, a properly crafted loan agreement better matches the customer’s needs and contributes to the efficiency of the lender’s portfolio.