The CPA’s Role In Negotiating Loan Covenants

Learning Objectives

• To review financial covenants including what is a covenant and why are they used.
• To discuss the common type of financial covenants including the Current Ratio, Debt to Equity Ratio, and EBITDA formulas.
• To evaluate additional financial covenants including those dealing with Fixed-Charge Coverage, Net Worth, and the BBC.
• To discuss creating, negotiating, setting, and monitoring financial covenants.
• To analyze the institution’s recourse when a covenant has been broken.
• To analyze case studies to summarize the webinar ideas.

Course Description

It has been observed that the banks have been very strict with their rules in the arrangement of loan covenants. Breaching or tripping any of the covenants may have a devastating effect on the business.

In this webinar, the speaker provides an in-depth understanding of how a CPA can gain key knowledge about the construction of the covenants and the power to negotiate the same.

Key Topics covered in this Accounting CPE webinar:

• Review financial covenants including what is a covenant and why are they used.
• Explore the common type of financial covenants including the Current Ratio, Debt to Equity Ratio, and EBITDA formulas.
• Evaluate additional financial covenants including those dealing with Fixed-Charge Coverage, Net Worth, and the BBC.
• Discuss creating, negotiating, setting, and monitoring financial covenants.
• Cover the institution’s recourse when a covenant has been broken.
• Utilize case studies to summarize the webinar ideas.

Overview

• Common Types of Loan Covenants

  24 mins
• Personal Cash Flow

  48 mins
• Global Cash Flow

  53 mins
• Calculating Financial / Loan Covenants

  68 mins
• Additional Loan Covenants

  81 mins
• Creating, Negotiating, Setting, and Monitoring Loan Covenants

  98 mins