pikestaff
Member of DD Central
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Post by pikestaff on Apr 17, 2018 13:30:28 GMT
Asking if we will agree to replace a debt service covenant of 1.25x, which has been breached every time for reasons sort of explained in the survey, with an EBITDA covenant of 1.25x (against more than 2x at present).
I've noted NO (B). I'd not object to a sensible relaxation of the debt service covenant , but the proposal to replace it with a very lax EBITDA covenant is not acceptable to me. EBITDA says nothing about working capital control, which could easily get out of hand.
I wonder what proportion of lenders understand this. I wish AC did not have votes and made the decisions themselves.
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adrianc
Member of DD Central
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Post by adrianc on Apr 17, 2018 14:08:46 GMT
I wonder what proportion of lenders understand this. I wish AC did not have votes and made the decisions themselves. I'm not a total accounting numpt, but I came here to get the opinion of others on this one, precisely because I didn't really understand...
"Has failed 1.25x every time" does not compare well in my eyes to "2.1x last time". It strongly suggests this is much, MUCH laxer. I wondered if I was missing something...
Ta. B it shall be from here.
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Post by crabbyoldgit on Apr 17, 2018 14:32:26 GMT
B , there must be a better way of monitoring the overall average annual performance of the company , it's not the only seasonal business out there.
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angrysaveruk
Member of DD Central
Back and to the left..
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Post by angrysaveruk on Apr 17, 2018 16:12:38 GMT
I voted no action. As long as they pay I dont care.
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niceguy37
Member of DD Central
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Post by niceguy37 on Apr 17, 2018 16:17:09 GMT
... I wonder what proportion of lenders understand this. I wish AC did not have votes and made the decisions themselves. I must admit I've wondered how useful voting is compared to the time it takes. For me the main issue is that the platform has (or should have) experience, expertise and much-more-direct access to both the facts and the borrower. I suppose the issue is in cases where we are looking at debt forgiveness. At least we don't have Funding Knight's system, which IIUC, requires a unanimous vote, which is not likely.
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lucky
Member of DD Central
Posts: 79
Likes: 46
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Post by lucky on Apr 17, 2018 18:36:45 GMT
Asking if we will agree to replace a debt service covenant of 1.25x, which has been breached every time for reasons sort of explained in the survey, with an EBITDA covenant of 1.25x (against more than 2x at present). I've noted NO (B). I'd not object to a sensible relaxation of the debt service covenant , but the proposal to replace it with a very lax EBITDA covenant is not acceptable to me. EBITDA says nothing about working capital control, which could easily get out of hand. I wonder what proportion of lenders understand this. I wish AC did not have votes and made the decisions themselves. I think a democratic vote is a good idea, they should however make it very clear in layman’s terms the pros and cons of voting one way or another.
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