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Thanks for such a nice explanation!

• lotsofpulp 2y ago
  One standardized metric used as a covenant is the debt service coverage ratio, especially for commercial real estate. The lender gets to monitor business performance in almost real time, and if it goes below what the borrower agreed to, they can force a renegotiation of terms or call the loan. https://www.investopedia.com/terms/d/dscr.asp https://www.investopedia.com/terms/d/dscr.asp