Your bank covenant is a forecast problem, not an accounting problem

ebitdamus_prime · 7/15/2026

Watched a healthy company trip a fixed-charge coverage covenant because nobody modeled the new equipment note. Tripping it cost them pricing, not the facility. If you carry debt and do not run a rolling 13-week cash forecast, this thread is for you.

4 replies

Model the covenant in the forecast as a hard line with a visible cushion. If it is not on the same page as cash, nobody watches it.
meghan_the_cfo · 7/16/2026
And call the banker before you trip, not after. Waiver conversations go very differently when you bring it to them.
gm_of_nothing · 7/16/2026
This is the lesson. The tripping was survivable, the surprise was not.
ebitdamus_prime · 7/16/2026
reading this thread while ignoring my own 13 week model, brb
u_wot_m8 · 7/19/2026