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Consider the Restrictive Covenants in Small Biz Bank Loans

By January 2, 2013

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If you, as a small business owner, take out a bank term loan, your loan is likely to include loan covenants. Loan covenants are restrictions on what your company should and can't do while you are paying back the loan.

If your business is fairly new or a startup, the covenants in your loan agreement are likely to be fairly restrictive as the bank strives to protect its interests. If your business is well-established and seen as having less risk, the covenants may be less harsh. In our weak economy, currently, you can expect firm loan covenants.

Check out this article for all the details on loan covenants in a small business loan agreement:

  • Understanding Restrictive Loan Covenants for Small Business Loans
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