What is covenant in SAP FS-FBS-CML-LWP - SAP Loans Workplace?

SAP Term: covenant

• Component: FS-FBS-CML-LWP

• Component Name: SAP Loans Workplace

• Description: An obligation agreed with a customer and stipulated in a loan contract. The customer must comply with this obligation and furnish proof of such by contractually agreed deadlines. Obligations are subdivided into financial, informational or other covenants. They can also be subdivided into hard and soft.covenants mainly for Financial Covenants, depending on the respective contractual consequence.

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• Key Concepts: 
  A covenant is a legally binding agreement between a borrower and a lender that outlines the terms of a loan. In the context of SAP Loans Workplace (FS-FBS-CML-LWP), covenants are used to define the conditions that must be met in order for the loan to remain in good standing. These conditions may include restrictions on the borrower’s activities, such as limits on borrowing additional funds or restrictions on the sale of assets. 
  
  How to Use It: 
  In SAP Loans Workplace, covenants are used to ensure that the borrower meets certain conditions in order to maintain the loan in good standing. The covenants are set up by the lender and can be monitored by the borrower in order to ensure compliance. The borrower can also use the covenants to determine if they are able to take certain actions, such as borrowing additional funds or selling assets. 
  
  Tips & Tricks: 
  It is important for borrowers to understand and comply with all of their loan covenants in order to maintain their loan in good standing. Borrowers should review their loan covenants regularly and consult with their lender if they have any questions or concerns about their loan terms. 
  
  Related Information: 
  For more information about SAP Loans Workplace, please visit https://help.sap.com/viewer/product/FS-FBS-CML-LWP/latest/en-US.