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

SAP Term: financial covenant

• Component: FS-FBS-CML-LWP

• Component Name: SAP Loans Workplace

• Description: Agreement that requires the borrower to comply with certain financial ratios or key financial figures.

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• Key Concepts: 
  A financial covenant is a contractual agreement between a lender and a borrower that sets out certain conditions that must be met in order for the loan to remain in good standing. These conditions typically include restrictions on the borrower’s financial activities, such as limits on debt levels, minimum liquidity requirements, and limits on dividend payments. The FS-FBS-CML-LWP SAP Loans Workplace module is used to manage financial covenants. 
  
  How to use it: 
  The FS-FBS-CML-LWP SAP Loans Workplace module allows users to set up and manage financial covenants. It provides an overview of all loan agreements and their associated covenants, as well as the ability to monitor compliance with those covenants. It also allows users to set up automated alerts when a covenant is breached or is about to be breached. 
  
  Tips & Tricks: 
  When setting up financial covenants, it is important to ensure that they are realistic and achievable. Covenants should be tailored to the specific needs of the borrower and should be regularly reviewed and updated as needed. 
  
  Related Information: 
  For more information on the FS-FBS-CML-LWP SAP Loans Workplace module, please refer to the official SAP documentation at https://help.sap.com/viewer/product/FS_FBS_CML_LWP/latest/en-US.