Covenants defined: A covenant is a promise in an indenture, or any other formal debt agreement, that certain activities will or will not be carried out. The purpose of a covenant is to give the lender more security. Covenants can cover everything from minimum dividend payments to levels that must be maintained in working capital.
Above is a definition for "Covenants" from PrivCo's Private Company Knowledge Bank, the definitive online and e-book guide to private companies and private company deals.
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