Compliance Monitoring – Creating Covenants

Balenz Compliance Monitoring is delivered with a list of standard covenants, but users can easily create custom covenants for an individual counterparty. Some of the standard covenants in Balenz Compliance Monitoring include:

• Receipt of financial statements (annual, quarterly, and/or monthly as well as audited versus company prepared)
• Delivery of loan compliance documents (guarantor financial statements or tax returns, insurance certificates, accounts receivable agings, inventory schedules, and borrowing base certificates)
• Financial statement covenants (minimum current ratio, maximum debt-to-equity, no consecutive quarterly losses)
• Other covenants (required insurance coverage, minimum collateral values)

There is no limit in Balenz Compliance Monitoring as to the number of covenants that can be tracked for an individual counterparty or the entire portfolio. For example, you might have covenants for a counterparty that states you must receive company prepared financial statements on a quarterly basis and audited financial statements on an annual basis. For each of these financial statement submissions, you might track multiple financial ratios covenants, such has minimum current ratio, maximum debt-to-equity, and minimum cash flow coverage.