LOAN COMPLIANCE CERTIFICATE
Certificate No.: [____]
Reporting Period Ending: [__/__/____]
Date of Certificate: [__/__/____]
PARTIES AND LOAN IDENTIFICATION
Borrower: [________________________________]
Borrower Address: [________________________________]
Borrower EIN/Tax ID: [________________________________]
Lender: [________________________________]
Lender Address: [________________________________]
Loan Agreement Date: [__/__/____]
Loan Agreement Amount: $[________________________________]
Loan Number/Reference: [________________________________]
Maturity Date: [__/__/____]
Guarantor(s) (if applicable): [________________________________]
ARTICLE 1. OFFICER CERTIFICATION
I, [________________________________] ("Certifying Officer"), the [________________________________] (title) of [________________________________] ("Borrower"), hereby certify to [________________________________] ("Lender") as follows, in connection with that certain Loan Agreement dated [__/__/____] (as amended, restated, supplemented, or otherwise modified from time to time, the "Loan Agreement"), by and between Borrower and Lender:
1.1 Authority and Capacity
The undersigned Certifying Officer has the authority and capacity to execute and deliver this Compliance Certificate on behalf of Borrower. The undersigned has reviewed the terms of the Loan Agreement, including but not limited to all covenants, conditions, and provisions contained therein, and has made or caused to be made a reasonably detailed review of the transactions and financial condition of Borrower and its Subsidiaries during the Reporting Period.
1.2 Basis of Certification
This Certificate is delivered pursuant to Section [____] of the Loan Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Loan Agreement.
1.3 Good Faith and Reasonable Inquiry
The representations and certifications contained herein are made after reasonable inquiry and to the best of the Certifying Officer's knowledge, information, and belief.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
2.1 Reaffirmation of Representations
Borrower hereby reaffirms that all representations and warranties set forth in the Loan Agreement and related Loan Documents are true and correct in all material respects as of the date of this Certificate (except to the extent such representations and warranties expressly relate to an earlier date, in which case they are true and correct in all material respects as of such earlier date).
2.2 No Default
☐ No Default. No Event of Default or event that, with the giving of notice or lapse of time or both, would constitute an Event of Default has occurred and is continuing under the Loan Agreement or any other Loan Document.
☐ Default Exists. An Event of Default or event that may constitute an Event of Default has occurred and is described in Exhibit A attached hereto, together with a description of the actions Borrower has taken or proposes to take with respect thereto.
2.3 Material Adverse Change
☐ No Material Adverse Change. Since the date of the most recent financial statements delivered to Lender, there has been no material adverse change in the business, operations, properties, assets, condition (financial or otherwise), or prospects of Borrower or any Guarantor.
☐ Material Adverse Change Occurred. A material adverse change has occurred as described below:
[________________________________]
[________________________________]
[________________________________]
2.4 Litigation and Proceedings
☐ No Material Litigation. There is no pending or, to Borrower's knowledge, threatened litigation, arbitration, governmental investigation, or proceeding that could reasonably be expected to have a Material Adverse Effect on Borrower.
☐ Material Litigation Exists. The following material litigation, arbitration, or proceedings are pending or threatened:
[________________________________]
[________________________________]
2.5 Insurance
Borrower maintains all insurance required under the Loan Agreement, including:
☐ Commercial general liability insurance
☐ Property/casualty insurance
☐ Business interruption insurance
☐ Workers' compensation insurance
☐ Key person life insurance (if required)
☐ Flood insurance (if required)
☐ Other required coverage: [________________________________]
All policies name Lender as loss payee and/or additional insured as required.
ARTICLE 3. FINANCIAL COVENANT COMPLIANCE CALCULATIONS
Instructions: Complete the following financial covenant calculations based on the financial statements for the Reporting Period ending [__/__/____]. All calculations shall be in accordance with GAAP applied on a consistent basis, unless otherwise specified in the Loan Agreement.
3.1 Debt Service Coverage Ratio (DSCR)
Required Minimum: [____]:1.00 (typically 1.20:1.00 to 1.50:1.00)
| Line Item | Amount |
|---|---|
| (a) Net Income | $[________________________________] |
| (b) Add: Depreciation and Amortization | $[________________________________] |
| (c) Add: Interest Expense | $[________________________________] |
| (d) Add: Non-Cash Charges | $[________________________________] |
| (e) Less: Non-Cash Income | ($[________________________________]) |
| (f) Less: Unfunded Capital Expenditures | ($[________________________________]) |
| (g) Less: Cash Taxes Paid | ($[________________________________]) |
| (h) Less: Distributions/Dividends Paid | ($[________________________________]) |
| (i) Adjusted Cash Flow (Sum of a through h) | $[________________________________] |
| (j) Current Portion of Long-Term Debt | $[________________________________] |
| (k) Interest Expense (cash paid) | $[________________________________] |
| (l) Capital Lease Payments | $[________________________________] |
| (m) Total Debt Service (Sum of j through l) | $[________________________________] |
| (n) DSCR = (i) ÷ (m) | [____]:1.00 |
☐ In Compliance ☐ Not in Compliance
3.2 Current Ratio
Required Minimum: [____]:1.00 (typically 1.10:1.00 to 2.00:1.00)
| Line Item | Amount |
|---|---|
| (a) Total Current Assets | $[________________________________] |
| (b) Total Current Liabilities | $[________________________________] |
| (c) Current Ratio = (a) ÷ (b) | [____]:1.00 |
☐ In Compliance ☐ Not in Compliance
3.3 Leverage Ratio (Total Debt to Tangible Net Worth)
Required Maximum: [____]:1.00 (typically 3.00:1.00 to 4.00:1.00)
| Line Item | Amount |
|---|---|
| (a) Total Funded Debt (including capital leases) | $[________________________________] |
| (b) Total Assets | $[________________________________] |
| (c) Less: Intangible Assets | ($[________________________________]) |
| (d) Less: Total Liabilities | ($[________________________________]) |
| (e) Tangible Net Worth = (b) − (c) − (d) | $[________________________________] |
| (f) Leverage Ratio = (a) ÷ (e) | [____]:1.00 |
☐ In Compliance ☐ Not in Compliance
3.4 Tangible Net Worth
Required Minimum: $[________________________________]
| Line Item | Amount |
|---|---|
| (a) Total Assets | $[________________________________] |
| (b) Less: Intangible Assets (goodwill, patents, trademarks, etc.) | ($[________________________________]) |
| (c) Less: Total Liabilities | ($[________________________________]) |
| (d) Tangible Net Worth = (a) − (b) − (c) | $[________________________________] |
☐ In Compliance ☐ Not in Compliance
3.5 Fixed Charge Coverage Ratio (FCCR)
Required Minimum: [____]:1.00 (typically 1.10:1.00 to 1.25:1.00)
| Line Item | Amount |
|---|---|
| (a) EBITDA | $[________________________________] |
| (b) Less: Cash Taxes Paid | ($[________________________________]) |
| (c) Less: Unfunded Capital Expenditures | ($[________________________________]) |
| (d) Less: Distributions/Dividends | ($[________________________________]) |
| (e) Adjusted EBITDA = (a) − (b) − (c) − (d) | $[________________________________] |
| (f) Total Debt Service (principal + interest) | $[________________________________] |
| (g) Capital Lease Payments | $[________________________________] |
| (h) Rent/Lease Expense | $[________________________________] |
| (i) Total Fixed Charges = (f) + (g) + (h) | $[________________________________] |
| (j) FCCR = (e) ÷ (i) | [____]:1.00 |
☐ In Compliance ☐ Not in Compliance
3.6 Maximum Capital Expenditures
Maximum Permitted (Annual): $[________________________________]
| Line Item | Amount |
|---|---|
| (a) Capital Expenditures during Reporting Period | $[________________________________] |
| (b) Year-to-Date Capital Expenditures | $[________________________________] |
☐ In Compliance ☐ Not in Compliance
3.7 Minimum Liquidity
Required Minimum: $[________________________________]
| Line Item | Amount |
|---|---|
| (a) Unrestricted Cash and Cash Equivalents | $[________________________________] |
| (b) Marketable Securities (if permitted) | $[________________________________] |
| (c) Available Revolving Credit Facility | $[________________________________] |
| (d) Total Liquidity = (a) + (b) + (c) | $[________________________________] |
☐ In Compliance ☐ Not in Compliance
ARTICLE 4. NON-FINANCIAL COVENANT COMPLIANCE
4.1 Affirmative Covenants
The Borrower certifies compliance with the following affirmative covenants:
☐ Maintenance of corporate/entity existence and good standing
☐ Maintenance of all required licenses and permits
☐ Timely payment of taxes and governmental charges
☐ Maintenance of properties and assets in good working condition
☐ Compliance with all applicable laws and regulations
☐ Maintenance of books and records in accordance with GAAP
☐ Provision of access to books, records, and properties for inspection
☐ Maintenance of required insurance coverages
☐ Payment of all employee benefit plan obligations (ERISA compliance)
☐ Compliance with environmental laws and regulations
☐ Maintenance of deposit accounts with Lender (if required)
☐ Other: [________________________________]
4.2 Negative Covenants
The Borrower certifies that it has not violated any of the following negative covenants:
☐ No incurrence of additional indebtedness without Lender consent
☐ No creation of liens or encumbrances on collateral
☐ No sale, transfer, or disposition of material assets outside ordinary course
☐ No mergers, consolidations, or acquisitions without Lender consent
☐ No change in ownership or control without Lender consent
☐ No change in business operations or corporate structure
☐ No distributions, dividends, or redemptions exceeding permitted amounts
☐ No transactions with affiliates on less-than-arm's-length terms
☐ No amendments to organizational documents without Lender consent
☐ No change in fiscal year
☐ No prepayment of subordinated debt
☐ Other: [________________________________]
4.3 Reporting Covenant Compliance
The Borrower certifies that the following reports have been delivered (or are being delivered concurrently):
| Report | Required Delivery | Delivered? |
|---|---|---|
| Annual audited financial statements | Within [____] days of fiscal year end | ☐ Yes ☐ No |
| Quarterly unaudited financial statements | Within [____] days of quarter end | ☐ Yes ☐ No |
| Monthly financial statements (if required) | Within [____] days of month end | ☐ Yes ☐ No |
| Annual tax returns | Within [____] days of filing | ☐ Yes ☐ No |
| Accounts receivable aging report | Within [____] days of [period] end | ☐ Yes ☐ No |
| Accounts payable aging report | Within [____] days of [period] end | ☐ Yes ☐ No |
| Borrowing base certificate (if applicable) | Within [____] days of [period] end | ☐ Yes ☐ No |
| Compliance certificate | Within [____] days of [period] end | ☐ Yes ☐ No |
| Annual budget/projections | Within [____] days of fiscal year start | ☐ Yes ☐ No |
| Other: [________________________________] | [________________________________] | ☐ Yes ☐ No |
ARTICLE 5. COLLATERAL AND SECURITY
5.1 Collateral Status
☐ All collateral described in the Loan Documents remains in the possession or control of Borrower (or Lender, as applicable) and is in good condition.
☐ No collateral has been sold, transferred, or otherwise disposed of outside the ordinary course of business without Lender's consent.
☐ All UCC financing statements remain effective and have been continued as required.
☐ All real property mortgages/deeds of trust remain in full force and effect.
☐ All insurance required on collateral is in place with Lender as loss payee.
5.2 Changes in Collateral
☐ No material changes in the nature, condition, or value of the collateral have occurred.
☐ Changes in collateral are described below:
[________________________________]
ARTICLE 6. FINANCIAL STATEMENTS
Attached hereto and incorporated herein by reference are the following financial statements for the Reporting Period ending [__/__/____]:
☐ Balance Sheet
☐ Income Statement / Profit and Loss Statement
☐ Statement of Cash Flows
☐ Statement of Changes in Equity
☐ Accounts Receivable Aging Schedule
☐ Accounts Payable Aging Schedule
☐ Detailed Debt Schedule
☐ Covenant Calculation Worksheets (supporting schedules)
☐ Other: [________________________________]
Prepared by: [________________________________]
Preparation Basis: ☐ GAAP ☐ Tax Basis ☐ Cash Basis ☐ Other: [____]
Reviewed/Audited by: [________________________________]
ARTICLE 7. COMPLIANCE SUMMARY
7.1 Covenant Summary Table
| Covenant | Required | Actual | Status |
|---|---|---|---|
| Debt Service Coverage Ratio | ≥ [____]:1.00 | [____]:1.00 | ☐ Pass ☐ Fail |
| Current Ratio | ≥ [____]:1.00 | [____]:1.00 | ☐ Pass ☐ Fail |
| Leverage Ratio | ≤ [____]:1.00 | [____]:1.00 | ☐ Pass ☐ Fail |
| Tangible Net Worth | ≥ $[________] | $[________] | ☐ Pass ☐ Fail |
| Fixed Charge Coverage Ratio | ≥ [____]:1.00 | [____]:1.00 | ☐ Pass ☐ Fail |
| Maximum Capital Expenditures | ≤ $[________] | $[________] | ☐ Pass ☐ Fail |
| Minimum Liquidity | ≥ $[________] | $[________] | ☐ Pass ☐ Fail |
7.2 Overall Compliance Determination
☐ Full Compliance. Borrower is in compliance with all financial and non-financial covenants set forth in the Loan Agreement as of the end of the Reporting Period.
☐ Partial Non-Compliance. Borrower is not in compliance with the covenants identified above and in Exhibit A. Borrower has taken or proposes to take the corrective actions described in Exhibit A.
☐ Material Non-Compliance. Borrower is in material breach of the covenants identified above. Borrower requests a waiver or amendment as described in the accompanying correspondence.
ARTICLE 8. EXCEPTIONS AND EXPLANATIONS (EXHIBIT A)
If any covenant is not in compliance, provide the following for each instance of non-compliance:
Covenant Name: [________________________________]
Nature of Non-Compliance:
[________________________________]
Date Non-Compliance First Occurred: [__/__/____]
Corrective Action Plan:
[________________________________]
Expected Date of Cure: [__/__/____]
Impact on Business Operations:
[________________________________]
(Attach additional pages as necessary)
ARTICLE 9. ADDITIONAL CERTIFICATIONS
9.1 ERISA Compliance
☐ No ERISA Event has occurred or is reasonably expected to occur that, individually or in the aggregate, could reasonably be expected to result in liability to Borrower in excess of $[________________________________].
9.2 Environmental Compliance
☐ Borrower is in compliance with all applicable environmental laws and has not received any notice of environmental violation, claim, or liability.
☐ Environmental matters are disclosed in Exhibit A.
9.3 Tax Compliance
☐ All federal, state, and local tax returns have been timely filed, and all taxes due and payable have been paid, except as being contested in good faith with adequate reserves.
9.4 Organizational Changes
☐ No change in Borrower's legal name, jurisdiction of organization, organizational structure, or principal place of business has occurred since the last Certificate.
☐ Changes are described as follows: [________________________________]
ARTICLE 10. STATE-SPECIFIC ENFORCEABILITY NOTES
California
- Financial covenant compliance certificates are generally enforceable under California Commercial Code Division 9 (UCC Article 9 equivalent). Officer certifications may give rise to personal liability for material misstatements under Cal. Corp. Code § 25401 (securities fraud) if applicable.
Texas
- Texas Business & Commerce Code Chapter 9 governs secured transaction compliance. Texas courts generally enforce financial covenants as written. Note that Texas has specific provisions regarding the enforceability of anti-deficiency waivers (Tex. Prop. Code § 51.003).
Florida
- Florida's enactment of UCC Article 9 (Fla. Stat. Chapter 679) governs secured transactions. Florida courts strictly construe default provisions and require clear, unambiguous language in covenant definitions. Fla. Stat. § 607.0841 addresses officer liability for false statements.
New York
- New York UCC Article 9 (N.Y. U.C.C. Law Art. 9) governs secured transactions. New York courts routinely enforce financial covenants as negotiated between sophisticated parties. Officers certifying compliance may face liability under N.Y. Bus. Corp. Law § 720 for false representations.
CERTIFICATION AND EXECUTION
IN WITNESS WHEREOF, the undersigned authorized officer of Borrower has executed this Loan Compliance Certificate as of the date first written above.
BORROWER:
[________________________________]
(Entity Name)
By: ______________________________
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
ACKNOWLEDGED AND RECEIVED BY LENDER:
[________________________________]
(Entity Name)
By: ______________________________
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
EXHIBITS AND ATTACHMENTS
☐ Exhibit A — Exceptions and Corrective Action Plans
☐ Exhibit B — Financial Statements for Reporting Period
☐ Exhibit C — Covenant Calculation Supporting Schedules
☐ Exhibit D — Insurance Certificates
☐ Exhibit E — Updated Collateral Schedule
☐ Exhibit F — Other: [________________________________]
SOURCES AND REFERENCES
- UCC Article 9 (Secured Transactions): Uniform Commercial Code, as adopted by each state, governing creation, perfection, and enforcement of security interests
- GAAP — FASB ASC 470 (Debt): Financial Accounting Standards Board, Accounting Standards Codification Topic 470, governing financial statement classification and disclosure of debt obligations
- 12 CFR Part 1002 (Regulation B — ECOA): Equal Credit Opportunity Act implementing regulation regarding creditor requirements for credit transactions
- Holland & Knight — Financial Covenant Compliance: https://www.hklaw.com/en/insights/publications/2017/05/time-to-check-the-financial-covenants-a-brief-summ
- Seward & Kissel — Financial Covenants: https://www.sewkis.com/publications/simply-speaking-november-2020-financial-covenants-part-ii/
- Truist — Understanding Loan Covenants: https://www.truist.com/resources/commercial-corporate-institutional/financing/articles/understanding-loan-covenants
This Compliance Certificate template is provided by ezel.ai for use by licensed attorneys. It must be customized to match the specific terms of the applicable Loan Agreement. This document does not constitute legal advice.
About This Template
Jurisdiction-Specific
This template is drafted for general use across all U.S. jurisdictions. State-specific versions with local statutory references are also available.
How It's Made
Drafted using current statutory databases and legal standards for financial banking. Each template includes proper legal citations, defined terms, and standard protective clauses.
Important Notice
This template is provided for informational purposes. It is not legal advice. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Last updated: March 2026