Many lending agreements require the borrowing company to maintain certain financial standards as demonstrated by its financial statements.This feature is known as a:
A)bond certificate.
B)loan covenant.
C)renegotiation.
D)contingent liability.

Question

Quizplus · Accepted Answer

A loan covenant is a debt feature which requires the borrower to maintain certain financial ratios or restrict certain activities the borrower may engage in.

Many Lending Agreements Require the Borrowing Company to Maintain Certain