Requesting Debt Covenant Relief from Commercial Banks During Downturns
Approaching your lender after breaching a debt covenant is too late. Here is how CFOs negotiate proactive covenant waivers with 90-day cash flow models.
Amit KasliwalCEO & Founder, Dehurdle
January 24, 20254 min read
The Proactive Covenant Waiver Script
Recommended Spoken Script
"We are projecting a temporary leverage covenant dip to 3.8x in Q3 due to planned capital expenditure for our automated plant expansion. We hold $4M in unencumbered liquidity and will return to 2.8x leverage by Q1. We are requesting a 2-quarter covenant waiver with an agreed 25 bps fee."
The 2-Minute Practice Drill
2-Minute Spoken Drill
The 2-Minute Practice Drill
Practice lender covenant negotiations in Dehurdle.