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Understanding Debt Facility Covenants and How BankStride Software Assists

Debt facility covenants are critical elements in financial agreements between lenders and borrowers. These covenants set specific terms and conditions that borrowers must adhere to throughout the loan term. Monitoring these covenants is essential for maintaining financial health, ensuring compliance, and avoiding potential defaults. This article explores the importance of debt facility covenants and how BankStride software can enhance covenant monitoring.

What are Debt Facility Covenants?

Debt facility covenants are stipulations set by lenders in loan agreements to protect their interests and ensure the borrower maintains financial stability. These covenants can be broadly categorized into two types:

  1. Financial Covenants: These are specific financial metrics that borrowers must maintain. Common financial covenants include:

    • Debt-to-Equity Ratio: Limits the amount of debt relative to shareholders' equity.

    • Interest Coverage Ratio: Requires a minimum level of earnings before interest and taxes (EBIT) to cover interest payments.

    • Current Ratio: Ensures the borrower has sufficient short-term assets to cover short-term liabilities.

    • Leverage Ratio: Controls the amount of total debt relative to total assets.

  2. Non-Financial Covenants: These covenants include operational and administrative requirements such as:

    • Reporting Requirements: Timely submission of financial statements and compliance reports.

    • Restrictions on Additional Debt: Limits on taking on additional debt without lender approval.

    • Asset Disposition: Restrictions on selling or disposing of significant assets.

The Importance of Monitoring Debt Facility Covenants

Monitoring debt facility covenants is crucial for several reasons:

  • Compliance: Ensuring adherence to covenant terms helps avoid penalties, defaults, or loan accelerations.

  • Risk Management: Regular monitoring helps identify potential financial issues early, allowing proactive measures.

  • Lender Relations: Maintaining compliance builds trust and credibility with lenders, facilitating future financing opportunities.

  • Financial Health: Adherence to covenants promotes disciplined financial management and stability.

How BankStride Software Enhances Covenant Monitoring

BankStride software offers a comprehensive solution for monitoring debt facility covenants, providing several key features that streamline and automate the process:

  1. Automated Data Extraction and Integration

    • BankStride integrates with existing financial systems, enabling seamless data extraction from financial statements and reports. This ensures accurate and up-to-date information for covenant calculations.

  2. Real-Time Monitoring and Alerts

    • The software continuously monitors financial metrics and covenant thresholds in real-time. It generates alerts and notifications if a covenant is at risk of being breached, allowing for timely intervention.

  3. Customizable Dashboards and Reporting

    • BankStride offers customizable dashboards that provide an intuitive overview of covenant compliance status. Detailed reports can be generated to meet internal and external reporting requirements, enhancing transparency and accountability.

  4. Advanced Analytics and Insights

    • The software provides advanced analytics to identify trends and potential issues. These insights support strategic decision-making and long-term financial planning.

  5. Compliance Management

    • BankStride helps manage non-financial covenants by tracking deadlines for reporting requirements and other administrative obligations. This ensures all aspects of the loan agreement are met.

  6. User-Friendly Interface

    • The software features a user-friendly interface that simplifies the process of monitoring and managing covenants. This reduces the administrative burden on financial and compliance teams.

Benefits of Using BankStride for Covenant Monitoring

  • Risk Mitigation: By providing real-time alerts and comprehensive monitoring, BankStride helps mitigate the risk of covenant breaches and financial penalties.

  • Efficiency: The automation of data extraction, monitoring, and reporting streamlines the covenant management process, saving time and resources.

  • Accuracy: Integration with financial systems ensures that the data used for covenant calculations is accurate and up-to-date, reducing the risk of errors.

  • Enhanced Compliance: BankStride ensures that all covenant requirements are met, maintaining compliance with loan agreements and fostering strong lender relationships.

In conclusion, debt facility covenants are vital components of financial agreements that require diligent monitoring to ensure compliance and maintain financial health. BankStride software provides a robust solution for automating and enhancing covenant monitoring, offering features that improve accuracy, efficiency, and risk management. By leveraging BankStride, companies can effectively manage their financial obligations, mitigate risks, and support sustainable growth.

Covenant Tracking & Monitoring are important part of managing borrowers financial and reporting documents for loan monitoring. Almost 70% of banks still rely on some combination of spreadsheets, core ticklers, or other manual processes.

BankStride is a digital banking platform you've been waiting for. BankStride makes it easy for banks to automate loan documents, exceptions tracking, loan reporting and covenant monitoring. No more managing checklists, searching for files in emails, or waiting on updates from other parties. Just create your requests and let BankStride do the work for you. 

Many Banks and lending companies depend on non-public client information to provide their
services. Examples include:

  • Automate Document Gathering

  • Checklist For Loan Reporting Requirements

  • Frictionless Customer Experience To Send Documents

  • Create Credit Exceptions & Tickler Tracking

  • Automated Loan Monitoring and Loan Compliance

  • Loan Reporting, Risk & Financial Reporting

Without a dedicated tool, professionals would have to manually manage checklists and calendar
events to keep track of all required information. BankStride automates this work while improving
security and reporting.

Why BankStride platform

  • BankStride is a web-based software solution for commercial banks and credit unions that works with customers to manage loan agreements and eliminate credit exceptions. FileStride improves credit exception management by reaching beyond the walls of the bank to work directly with customers.

  • BankStride is like autopay for customer information.

  • With BankStride, banking teams can schedule recurring requests for documents like financial statements and tax returns, compare actual and threshold covenant values (e.g. minimum DSCR), and send compliance certificates for signature via DocuSign.

  • Customers respond to information requests much like paying an online invoice – they clearly see what’s required of them and they act. Customers can respond using a login-less portal or by email – no account or password required.

How does this help banks

  • A borrower’s risk profile can change significantly over the years that follow a lending event. Managing loan agreement adherence through reporting and internal monitoring is an ongoing and tedious battle for banks. 

  • Banks that pursue superb loan agreement management are faced with handling complex recurring tasks using the basic tools of email, spreadsheets, and calendar ticklers. Banks that let this work fall behind risk delaying their awareness of problematic loans or operating practices, jeopardizing capital and reputation.

  • With BankStride, banks gain high-resolution loan agreement monitoring that saves time and delights customers.

How does our bank customer use BankStride

  • Our bank customer uses BankStride to schedule and automate the activities required to monitor loan agreements. 

  • For example, BankStride has proven effective in managing revolving lines of credit. BankStride  automatically requests and reminds customers to submit monthly AR and AP listings, inventory analyses, and borrowing base certificates each month. 

  • BankStride reminds the banking team to test various financial ratios. The results of the customer’s actions and the ratio testing all roll up to per-banker and per-office reports that can be run on-demand in seconds.

BankStride is powerful for bankers




  • Track financial reporting, covenants, and certificates.

  • Issue compliance certificates for signature via DocuSign.



  • Bank leadership can drill down to identify pockets of risk and underperformance.

  • Every member of the team knows where to focus.



  • BankStride supports one-off and recurring information requests.

  • Flexible storage layer configuration options available.


Easy for bank customers





  • Customers receive tokenized links that enable portal access.

  • Bankers can request information from anybody with an email address.



  • Easy to use customer portals show the customer exactly what is needed.

  • Email-based file ingestion enables customers to email files in response to requests.



  • Reminders and alerts are aggregated to prevent information overload.

  • Alerts can be toggled per-user.

  • Customizable reminder schedules.


Automate Bank customer information requests for covenant monitoring , loan reporting, financial reporting and exception handling.

FiStride allows you and your customers to exchange information with zero friction so that you can reduce credit exceptions and recover valuable time. 

Know what you have, know what you need.

Why BankStride?

We're the digital banking solution you've been waiting for.

We make it easy to automate your loan reporting and covenant monitoring. No more managing checklists, searching for files in emails, or waiting on updates from other parties. Just create your requests and let BankStride do the work for you. 

How it works

BankStride combines checklists with cloud storage to help you communicate and monitor your information requests and covenants.

All it takes to get started:

  1. ​Request items by creating projects for one-off items or templated lists.

  2. Review incoming files from your client and mark items as satisfied or complete.

  3. Repeat with automatically recurring requests and reminders.

Who it's for

BankStride is a solution for individuals, teams, and banks that need a better way to request information. We've facilitated thousands of customer relationships and transactions with teams in banking, accounting, consulting,  and advisory services, just to name a few. 


Bankers increase efficiency and improve loan risk and compliance with loan monitoring, reporting and exceptions.

Know what you have,
know what you need

Create recurring requests with status indicators, reports and automatic nudges that keep everybody in the know.

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Many ways in,
password optional

Customers have the option to send files through email or a login-less portal. Either way, we get the files where they need to go.

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Built to empower bankers

Track and monitor financial reporting, covenants, and certificates, and identify pockets of risk and non-compliance.

Structured for you and
your team

Add your colleagues with a single click, and manage access permissions so the whole team can get the job done. 

We've facilitated over 1,000,000 client interactions...and counting.

Who are we
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Seth J.

"BankStride has saved us tremendous time and effort by getting exactly the information we need."

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