When a lender includes conditions in a loan agreement to protect its loan,these are known as:
A) loan agreements.
B) loan covenants.
C) loan terms.
D) loan actions.

Question

Quizplus · Accepted Answer

Loan covenants are conditions and restrictions in a loan agreement aimed at protecting the lender's loan. The covenants can include restrictions on the borrower's actions or requirements for certain financial ratios to be maintained. Loan agreements, loan terms, and loan actions are all related to loans but do not specifically refer to the conditions included to protect the lender.

When a Lender Includes Conditions in a Loan Agreement to Protect