# Loan covenant compliance

> Loan covenant compliance: Covenant figures from statements; breach or not Checked: proven by code. Produces compliance certificate check, breaches.

Source: https://www.sumarity.ai/library/loan-covenant-compliance/

Banking and payments 

# Loan covenant compliance

Reads the facility agreement, the borrower's financial statements. Produces compliance certificate check, breaches. Code works out every figure, the Judgement Engine answers the narrow questions, and whatever stays uncertain goes to a person.

Proven by codeScreening, audit and compliance
Start from this workflowMore for banking  

What it decides

## Narrow questions, each with a check behind it.

Covenant figures from statements; breach or not
Proven by code: figures from the borrower's statements. Code proves the answer from the data itself: totals tie, a match is exact, the quote is on the document. Most of these judgements settle without a person.

| Reads | The facility agreement, the borrower's financial statements 
| Produces | Compliance certificate check, breaches 
| Who signs | A person on your team, with every figure traced to its document and every call on record 
| Process | Screening, audit and compliance 
| Industry | Banking and payments    

See it run

## Every line, decided where it's safest.

An example run. Each stage lights up as a line is decided there; pick a stage to see its lines.

ReadsThe facility agreement, the borrower's financial statementsCodeReads, matches, ties out and works out every figure.JudgementCovenant figures from statements; breach or not. Settles only when it clears the cutoff and code proves it.A personGets whatever stays uncertain, with the evidence. Their ruling tunes the next run.ProducesCompliance certificate check, breaches  
Loan covenant compliance · example run Example run  

| Ref | Item | Value | Decided by  
| Q3 | Leverage ratioDebt ÷ EBITDA = 2.8 (limit 3.0) | 2.8 | Code · computed 
| Q3 | Interest coverEBITDA ÷ interest = 5.1 (minimum 4.0) | 5.1 | Code · computed 
| Q3 | EBITDA add-backsRestructuring cost allowed · 0.90 | 320,000 | Engine · proven 
| Q3 | Change of auditorNotice given in time? Letter undated |  | To a person 
| Q3 | Capex limitWithin the annual limit · 0.94 | 1.2m | Engine · proven  
|  

Settled 4 To a person 1 Settled wrong 0      Illustrative lines. Amber rows are the Judgement Engine's calls; each settles only above its cutoff and when its check agrees.    

What it could save

## Your volumes in. Your hours out.

In our tests, between 24% and 42% of items still went to a person after tuning. Set your own share; a pilot measures it on your data.

Items per run 
Runs per month 
Minutes per item by hand 
Cost per hour

Share of items that still need a person: 30%  

By hand today80 ha month 
With Sumarity24 ha month, for the items people decide 
Saved56 hCHF 53,760 a year    

Related

## Start from what's closest.

### Screening, audit and compliance in other work

Finance

### Supplier bank-detail change verification

Whether a change request is genuine

Cross-checkedFinance

### Expense claim audit

Whether each claim fits policy; receipt matches the claim

Proven by codeBanking

### Sanctions screening alert review

True match or false positive

Vetoed by code

### More for banking

### Payment exceptions and investigations

Why a payment failed or is queried; the action

Proven by code

### Card disputes and chargebacks

Network reason code; evidence enough to fight

Cross-checked

### Nostro and vostro reconciliation

Which statement line matches which booking

Proven by code  

Questions

## What buyers ask

What happens when Sumarity isn't sure?

Nothing settles below the cutoff, or when the check disagrees. The item goes to a person in the inbox with what the engine saw, its best answer and the runner-up. The person's ruling is kept and tunes the next run.

How are its judgements checked?

Code proves the answer from the data itself: totals tie, a match is exact, the quote is on the document. Most of these judgements settle without a person.

Can we change it to fit how we work?

Yes. Start from this workflow and describe your differences in plain words. The design assistant revises it, the validator checks it, your expert reviews it on the canvas, and your admin publishes it.

Does it read our files as they are?

Yes: spreadsheets and CSV in any layout, PDFs, bank formats and e-mail attachments. Sumarity suggests how each column maps, proves the mapping on a sample and remembers it once a person confirms it.

Where does our data go?

Sumarity runs in Zurich. Your data, backups and logs are stored in Switzerland.

How does it get better?

Your team's rulings become an answer key. Better questions and cutoffs are proposed, tested on data they haven't seen, and published only when your admin approves. It improves itself, with permission.

## Start from this workflow. Run it on your data.

A pilot runs alongside your own process for a few weeks, at our cost, and ends in a line-by-line comparison.

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