Term loans impose restrictions called:
A)loan boundaries.
B)covenants.
C)financial limits.
D)margins.

Question

Quizplus · Accepted Answer

Term loans impose restrictions called covenants, which are requirements or limitations that borrowers must adhere to during the loan term. These restrictions are put in place to protect the lender's interests and ensure that the borrower can repay the loan. Covenants may include financial ratios, limits on asset sales, restrictions on dividends, or requirements to maintain certain levels of working capital or cash reserves.

Term Loans Impose Restrictions Called