Paste the financial covenants from a loan or credit agreement. Get every leverage ratio, fixed charge coverage ratio and interest coverage test, each step-down, the equity cure and the definitions they rely on — then check headroom in your browser.
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Total, senior and first lien leverage, fixed charge coverage, interest coverage and debt service coverage.
Each threshold with the period it applies to, copied exactly and parsed into numbers.
Test frequency, measurement period, first test date and springing triggers.
How the cure works, how often it can be used, amount limits — and whether cure cash can count twice.
Whether cash is netted against debt and whether the netting is capped.
Type your numbers to see headroom against each level. They stay in your browser.
Financial covenants are the loan covenants that set numeric tests a borrower must meet — a maximum leverage ratio, a minimum fixed charge coverage ratio or interest coverage ratio, minimum EBITDA or liquidity. Other debt covenants include affirmative covenants (things the borrower must do) and negative covenants (things it must not do, such as incurring debt or granting liens).
A maintenance covenant is tested every period whether or not the borrower does anything; an incurrence test applies only when the borrower takes an action. Covenant-lite loans drop maintenance tests for term lenders, often keeping a springing covenant for the revolver that is tested only when usage passes a trigger.
Every ratio depends on definitions — Consolidated EBITDA and its add-backs above all. Check them with the free EBITDA add-back analyzer, and turn the tests into a covenant compliance checklist.
| Covenant | Formula | Test |
|---|---|---|
| Total leverage ratio (debt to EBITDA) | Total debt ÷ EBITDA | Maximum |
| Net leverage ratio | (Total debt − cash) ÷ EBITDA | Maximum |
| Senior / first lien leverage | Senior or first lien debt ÷ EBITDA | Maximum |
| Fixed charge coverage ratio (FCCR) | (EBITDA − capex − taxes) ÷ fixed charges | Minimum |
| Interest coverage ratio | EBITDA ÷ interest expense | Minimum |
| Debt service coverage ratio | Cash flow ÷ scheduled principal and interest | Minimum |
| Minimum liquidity / EBITDA; capex cap | Dollar amounts | Minimum / maximum |
Exact formulas vary by agreement — the definitions decide. Equity cures let a sponsor inject equity that counts as EBITDA to fix a missed test, usually limited in number and frequency. Monitoring covenants every quarter? See how Continua handles commercial credit review and finance underwriting, or read our guide to AI underwriting platforms.
Illustrative drafting — and what the extractor pulls out of each.
The Borrower shall not permit the Consolidated Total Leverage Ratio as of the last day of any fiscal quarter to exceed 4.50:1.00, stepping down to 4.00:1.00 for fiscal quarters ending after December 31, 2028.
Two levels extracted, each with the period it applies to.
The Borrower shall not permit the Fixed Charge Coverage Ratio for any Test Period to be less than 1.20:1.00.
Minimum test of 1.20x, measured over the Test Period.
If, on the last day of any fiscal quarter, the aggregate Revolving Loans exceed 35% of the Revolving Commitments, the Borrower shall not permit the First Lien Net Leverage Ratio to exceed 6.75:1.00.
Flagged as springing, with the 35% usage trigger quoted.
The Sponsor may make a Cure Amount contribution, which shall be added to Consolidated EBITDA, provided that no more than four Cure Amounts may be made during the term of this Agreement.
Mechanism and limits extracted; flagged if cure cash is not excluded from netting.
Add the financial covenants section and the equity cure — plus the definitions they use.
Each covenant, level, step-down, test period and cure limit, with thresholds parsed into numbers.
Type your numbers to test each level. They are calculated in your browser and never sent to us.
Promises by the borrower to keep specific financial ratios or amounts, such as maximum leverage or minimum fixed charge coverage, tested at set dates.
Maintenance covenants are tested every period whether or not the borrower does anything; incurrence covenants are tested only when the borrower takes an action such as borrowing or paying a dividend.
A maintenance covenant that applies only when a trigger is met, commonly when revolver usage exceeds a set percentage.
A right for the sponsor to inject equity that is counted as EBITDA, or used to reduce debt, so the borrower can meet a missed covenant — usually limited in number and frequency.
Negative covenants restrict actions such as incurring debt, granting liens or making investments; financial covenants set numeric tests. The extractor covers financial covenants.
It extracts the tests and thresholds. The headroom check uses numbers you type, runs in your browser and is never sent to our servers.
Files are converted to text on our servers and not stored. Text is processed by our AI model provider for this check only and is not used for training.
Upload the credit agreement, every amendment and each compliance certificate. Continua tests reported numbers against the covenant definitions with page-level citations.