Which of the following is a positive loan covenant?

Question

Quizplus · Accepted Answer

A minimum working capital ratio is a positive loan covenant as it ensures that the borrower has enough current assets to cover short-term liabilities, indicating a healthy and stable financial condition.

Answer: None of the other given answers
 B) A maximum gearing ratio and C) A maximum level of unsecured debt are negative loan covenants as they limit the borrower's ability to leverage their assets and take on additional debt. These covenants make it harder for the borrower to access additional financing in the future.

Which of the Following Is a Positive Loan Covenant