Covenant Compliance Software & Monitoring
Track every financial covenant, test it continuously against your numbers, and see pressure building before your lender does.
The most expensive spreadsheet in finance
A missed covenant is rarely a surprise to the numbers — only to the people watching them. Financial covenants like debt service coverage, fixed charge coverage, leverage, and liquidity move every month, but most companies only test them quarterly, right before the compliance certificate is due. By then, options have narrowed.
Covenant compliance software changes the cadence. Covenants are defined once — exactly as the credit agreement defines them — and then tested continuously as financial data arrives. Instead of discovering a breach at quarter-end, finance teams watch headroom trend and act early.
LORIQ provides dedicated covenant monitoring that shifts your workflow from retroactive calculation to proactive surveillance.
Calculated using your agreement's exact definitions
The hard part of covenant compliance isn't arithmetic — it's definitions. What counts as EBITDA under this specific agreement? Which debt is included in the leverage test? Does restricted cash count toward liquidity? Every credit agreement answers these questions differently.
Through a supported draft-and-review workflow, LORIQ helps extract the specific contractual definitions from your credit agreements and amendments. Calculations run on deterministic credit engines — the same inputs always produce the same answer. It relies on your approved formulas, never probabilistic guesses.
Limitations and Adjacent Workflows
Covenant compliance software is a calculation and tracking engine, not a replacement for legal interpretation. While LORIQ assists in structuring definitions and testing financial data, users must verify all extracted terms and consult outside counsel for complex legal ambiguities.
This workflow naturally extends into broader credit agreement management, where the system tracks the reporting dates and exceptions associated with these covenants.
From covenant language to monitored position
Useful covenant monitoring depends on the agreement's definitions, the correct testing period, reviewed financial inputs, and evidence—not a generic ratio formula.
Terms, thresholds, and testing rules
Capture the covenant formula, defined terms, required threshold, testing frequency, cure provisions, and reporting date from the active agreement set.
Approved formulas and financial inputs
Trace proposed definitions to source language, review the formula, map the required financial concepts, and approve the controlling methodology.
Status, headroom, trend, and evidence
Track current results, remaining cushion, movement over time, upcoming test dates, exceptions, and supporting calculation evidence.
How LORIQ keeps you compliant
Continuous covenant testing
Every covenant tested against your latest financials — not just at quarter-end.
Headroom & trend visibility
See how much cushion each covenant has and which direction it's moving, months before a formal test date.
Agreement-accurate definitions
Covenants computed using your agreement's own defined terms, based on your reviewed and approved formulas.
Scenario stress testing
Model rate changes, revenue pressure, or new debt and see the covenant impact before you commit to a decision.
Compliance calendar
Certificate deadlines, reporting requirements, and test dates tracked across every facility and lender.
Lender-ready reporting evidence
Compliance evidence and covenant history organized for lender conversations, renewals, and audits.
Continue through the credit workflow
Frequently asked questions
What is covenant compliance software?
Covenant compliance software tracks the financial covenants in a company's credit agreements — like debt service coverage, leverage, and liquidity ratios — and tests them automatically against the company's financial statements. This provides finance teams with continuous visibility into compliance status and headroom, rather than discovering issues at quarter-end.
How does LORIQ know how my covenants are defined?
LORIQ assists in extracting each covenant with its contractual definition — including agreement-specific terms like defined EBITDA and permitted add-backs. Your team reviews and approves these formulas. The calculations themselves run on deterministic engines, so results are exact, repeatable, and transparent.
Can LORIQ warn us before we breach a covenant?
Yes. Because covenants are tested continuously, LORIQ shows headroom trending down long before a formal test date — giving you time to manage the numbers, talk to your lender proactively, or seek an amendment from a position of strength.
Does covenant tracking work across multiple lenders?
Yes. LORIQ monitors covenants across every facility and lender in your portfolio, including cross-default exposure — so you can see how one covenant issue could ripple across other agreements.
See LORIQ on your own portfolio.
Built for commercial borrowers — not banks. Request demo access and see your credit position the way a lender would.
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