E.g. what is the Depository Requirement Financial Covenant option?
GoDocs currently offers the option to include financial reporting and financial covenants (e.g. that outline a required account with Lender) as a condition of the loan.
See the quick overview video clip here: How to Add Financial Reporting to My LoanDocs Order
Financial reporting resides in section D.6 (or somewhere similar) of the Loan Agreement. If applicable, financial covenants (e.g. LTV or DSCR) are in section D.4 (or somewhere similar) of the Loan Agreement as well as a corresponding Compliance Certificate template that can be used at Lender’s discretion in the Exhibit section of the loan agreement.
See the quick overview video clip here: How to Add Financial Covenants to My LoanDocs Order
With this, you have many options to tailor the conditions of this covenant. Under the Loan Tab you can scroll down and toggle to "yes" for Financial Covenants:
Which then opens up a tab for Financial Covenants: 
Below a list of GoDocs' financial covenants available under that tab:
- Loan-To-Value (LTV)
- Debt Service Coverage Ratio (DSCR)
- Minimum Liquidity
- Minimum Tangible Net Worth
- Minimum Tangible Member's Equity
- Average Funded Indebtedness to EBITDA
- Fixed Charge Coverage Ratio
- Current Ratio
- Total Indebtedness to Total Capitalization
- Depository Requirement
Scrolling to the very bottom of that page is where the Depository Requirements reside. The Depository Requirement data field is an optional covenant to require one or more parties obtain a certain account with Lender as a condition of the loan. The user can select the type of account; Operating Account or Deposit Account.
- Operating Account:
- Deposit Account:
The user can select the requirement non-compliance result; Breach of Covenant, Event of Default or Rate Increase.
- Breach of Covenant:
- Event of Default:
- Rate Increase: This option allows the user to select the (i) amount of basis points of the increase, (ii) the term of the rate increase, (iii) option to include an Event of Default.
- During Period of Violation
- Until Indebtedness is Paid in Full
The user can identify if the account may bear interest or not.
- May Bear Interest:
- Shall Not Bear Interest:
The user can identify the testing cadence; Monthly, Quarterly, Semi-Annually and Annually.
- Monthly:
- Quarterly:
- Semi-Annually:
- Annually:
The user can also identify a Minimum Deposit Amount on the data entry, as well as if the balance is based on an average number of days.
The covenant is designed such that if you do not have a depository minimum in the loan documents, you do not need to include it and it specifies the amount as $0. Some customers may have an account minimum on the account itself, at the banking level, so they don't want to have a level in the loan documents that may be different. This is similar in that they may want a spot-check minimum, rather than an average minimum since the account balance may vary as transactions throughout the reporting period.
