After each month-end close, every loan covenant for each company is recalculated from its books, such as debt service cover and net debt to EBITDA. Headroom is tracked in Google Sheets, thin margins alert the partner, and compliance certificates are drafted for the bank.
Typical results
≈2 months
Typical warning before a covenant test is at risk
15%
Headroom level that triggers an alert to the partner
Monthly
Covenants recalculated after every close
Figures reflect typical results for this kind of automation.
The challenge
Business clients with bank loans must stay inside covenants such as a minimum debt service cover or a maximum net debt to EBITDA, tested each quarter. The firm's partners rebuild these figures by hand when the bank asks for a certificate, about three hours each, so a covenant drifting toward breach is spotted only about two weeks before the test.
Before and after
Partner minutes per compliance certificate
−89%Weeks of warning before a covenant test is at risk
4×Certificates sent to the bank after the due date, per year
−100%The automation
When a month is locked in a company's accounting software, Make pulls trailing 12-month EBITDA, debt service and net debt, then calculates each loan's covenants from a terms table of ratios, required levels and test dates. Figures and headroom are logged in Google Sheets. A covenant within 15% of its limit triggers an email to the responsible partner, and each test month a compliance certificate is drafted in Google Docs for the partner to sign.
How it works
- 01
Month locked in the books
Locking the month in a company's accounting software starts the covenant run for that company.
- 02
Ratios calculated per loan
Trailing 12-month EBITDA, debt service and net debt are pulled, and each loan's covenants, such as a debt service cover of at least 1.25, are calculated.
- 03
Headroom logged in Sheets
Each covenant's actual figure, required level and headroom are written to the company's covenant sheet, with a 12-month trend.
- 04
Alert when headroom gets thin
Any covenant within 15% of its limit emails the responsible partner with the figure, the limit and the accounts that moved it most.
- 05
Certificate drafted for the bank
In each test month, the bank's compliance certificate is drafted in Google Docs with the figures filled in, ready for the partner to check and sign.
Starts from
- Locked monthly ledger
- Loan covenant terms
Delivers
- Covenant sheet per company
- Thin-headroom alert
- Draft compliance certificate
The impact
Each compliance certificate takes about 20 minutes of checking instead of three hours of rebuilding figures. Because covenants are recalculated every month, thin headroom typically shows up about two months before a test date, which leaves time to talk to the bank or delay a large purchase, and certificates reach the bank on time.
Questions about this automation
Where do the covenant definitions come from?
From the loan agreements. Each covenant is entered once in a terms table: the ratio and how the bank defines it, the required level, the test frequency and the certificate due date. When a loan is refinanced or a waiver changes a level, the table is updated and the next run uses it.
How are bank-specific adjustments to EBITDA handled?
Many loan agreements add back items such as one-off costs or owner salaries above a set level. These adjustments are kept per company as named lines in the covenant sheet, so the partner can see and change each one, and every certificate shows the same adjusted figure the sheet does.
Is the certificate sent to the bank automatically?
No. The draft lands in the company's folder with every figure filled in and linked to the covenant sheet, and the partner checks, signs and sends it. Simple automations like this are usually live within days once the covenant terms for each loan are in the table.