Covenant Compliance Considerations

Loan Compliance Platform

Cerebro’s Compliance Navigator is a loan compliance platform designed to modernize the way companies manage, track and report covenant compliance. At Cerebro, we recognized a need to combat the inherent loan compliance challenges borrowers and lenders face. 

Common Compliance Challenges

  • Identifying & monitoring non-financial covenants across multiple credit agreements
  • Varying financial covenant definitions across agreements
  • Multi-entity structures with different sets of financials per agreement
  • SMEs across multiple departments who are responsible for subsections of the compliance questions (ie legal, accounting, operations, etc.)
  • Tracking monthly, quarterly and/or annual compliance requirements across agreements
  • Creating continuity of systems in case of department turn over
Symptoms of an outdated loan compliance process:

Since the 1990s, Excel spreadsheets, Outlook reminders, and legacy systems have been the key tools for loan compliance management. Ask yourself:

No? Then your internal processes are outdated. Its important to ensure your team can track with an audit history who submitted what to lenders and which department reported compliance documents.

No? Then your loan compliance team could miss a key deadline. This would make the management team appear unresponsible, cause uncomfortable conversations with your lender or worse, give them legal cause to call the loan. 

Yes? Then your compliance strategy is shortsighted. Loan compliance management is too sensitive to out-source. Its prone to human error which extra staffing rarely solves and compliance analysts can cost on average over $75,000 in salary per year. 

No. Then your organization has an operational risk and the risk increases if those team members leave immediately prior to reporting deadlines. Ensure that a systematic process is in place even if individuals switch jobs. 

Tech Savvy CFOs Use Cerebro

Violating a loan covenant is high-risk and could prompt the lender to invoke an acceleration clause or other penalties outlined in the loan agreement, such as an increased interest rate or default.

Cerebro Capital created a loan compliance platform that’s transforming the way companies manage compliance, moving beyond paper notes and spreadsheets. Compliance Navigator and Portfolio Navigator are loan compliance platforms that use proprietary technology to help companies reduce their risk of defaulting on a loan. 

  • 866.470.0705
  • info@cerebrocapital.com
  • 12 W Madison St.
    Baltimore, MD 21201

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