Covenant monitoring for private credit and direct lending
Track DSCR, ICR, LTV, and every other financial covenant across your entire loan book. Configure thresholds per counterparty, per facility. Know which covenants are at risk before the next board meeting, not after.
The credit work was finished before the money moved. Everything after that is somebody remembering to check.
The covenant package, drawn to scale
Each test carries its trigger and its headroom, so tight shows before failing does. Thresholds and operators are configured once per facility, and every status traces back to the submitted figure and the rule it was tested against.
Two compliant, one inside its warning band. A figure on its own says nothing; the distance to the limit is the number a credit team acts on.
Compliance plus performance, one score.
Blended compliance score (50% reporting, 50% covenant), AUM donut by fund, sector exposure, vintage IRR curve, compliance waterfall. Everything credit committees ask for, pre-built.
Three states. No ambiguity.
Every covenant in CapitalBridge resolves to one of three states: Compliant, At Risk, or Non-Compliant. The At Risk state is the one that matters most. It gives your team time to act before a formal breach, using a configurable headroom percentage that you define per covenant.
Current value exceeds the at-risk threshold. No action required.
Still above threshold, but within the headroom band. Your team gets notified now, not after the breach.
Below threshold. Flagged in dashboard, escalation triggered, LP report updated.
This same 3-state logic applies to every covenant type: ICR, LTV, leverage ratios, fixed charge coverage, and any custom metric your credit agreements require. Thresholds and headroom percentages are configured per counterparty, per facility.
What changes when you stop using spreadsheets
From onboarding to live monitoring in four steps
Configure your covenant packages
Define which covenants apply to each counterparty or set defaults at the fund/sector level using the cascading scope system. For each covenant, specify the metric (DSCR, ICR, LTV, leverage), the operator (greater than, less than, between), the threshold, and the headroom percentage.
Assign reporting requirements
Select which document types each counterparty must submit and on what schedule. Reporting requirements can be assigned at the fund level and overridden per sector or per counterparty. CapitalBridge automatically generates pending submissions 90 days before each due date.
Counterparties submit through their portal
Each counterparty gets a self-service portal showing what is due, what has been submitted, and what needs rework. They upload documents and enter financial data directly. A 7-tier automated escalation handles follow-ups so your team does not chase.
Covenants calculate, dashboard updates
When financial data is submitted and approved, covenant values are calculated against thresholds. The portfolio dashboard updates in real time: Compliant, At Risk, or Non-Compliant. Your team reviews exceptions, not spreadsheets.
Show your LPs that covenants are being monitored
Private credit managers report covenant status to their own investors every quarter. CapitalBridge provides the underlying data, audit trail, and dashboard that makes LP reporting credible rather than assembled from memory and email threads.
- Portfolio-wide covenant summary exportable to PDF or Excel
- Historical covenant trends per counterparty across reporting periods
- Full audit trail: who submitted, who reviewed, when status changed
- Compliance scores by fund, sector, and counterparty
The report is generated from the same book the dashboard reads, so an LP question about one figure is answered by walking back to the cell, not by rebuilding the quarter.
Reporting types built for private credit
CapitalBridge includes a library of 27 standard reporting types. Private credit teams typically use 8-12 of these, assigned at the portfolio, sector, or counterparty level. Here are the ones private credit teams use most.
Quarterly covenant compliance confirmation signed by the counterparty's CFO or authorized officer. In private credit, this is the primary document that triggers covenant status recalculation.
Detailed financial ratio calculations with supporting data. Shows the actual DSCR, ICR, and LTV computations that the counterparty used to arrive at their covenant compliance claim.
Income statement, balance sheet, and cash flow summary. The raw financial data your team uses to verify covenant calculations and track counterparty performance between annual audits.
Audited year-end financials with notes and auditor opinion. The annual baseline against which all covenant thresholds are validated and credit assessments are updated.
Forward-looking projections and debt service coverage forecasts. Used to assess whether a counterparty trending toward an At Risk state is likely to recover or continue declining.
Verification of reserve balances against required minimums. Critical in direct lending where DSRA adequacy is often a standalone covenant with its own threshold.
Plus 21 additional types including insurance certificates, operational reports, ESG monitoring, and portfolio-specific documents. Custom types can be added during configuration.
Questions private credit teams ask
Can't find yours? Book a call and ask it directly.
What software do private credit funds use for covenant monitoring?+
CapitalBridge provides covenant monitoring for private credit and direct lending funds. It tracks DSCR, ICR, LTV, leverage ratios, and custom financial covenants with configurable thresholds per counterparty and per facility. Three-state visual indicators (compliant, at risk, non-compliant) with headroom tracking give early breach warnings. Pricing is set by portfolio size alone, with no per-user fees and no setup fee, and is scoped on a call: see the pricing page.
How does covenant monitoring work for direct lending?+
In direct lending, covenant monitoring means tracking financial metrics submitted by counterparties against agreed thresholds. CapitalBridge automates this by configuring threshold operators and headroom percentages per covenant. When a counterparty submits financial data, the system instantly calculates covenant status and flags any values approaching (at risk) or breaching (non-compliant) thresholds.
Can private credit funds track covenants per facility?+
Yes. CapitalBridge supports per-counterparty and per-facility covenant configuration using a cascading assignment engine. Default thresholds can be set at the portfolio or sector level, then overridden for specific counterparties or facilities. Each covenant tracks independently, with its own threshold, operator, and headroom percentage.
"We used to spend the first two weeks of every quarter just collecting documents. Now counterparties submit through their portal, and we spend that time on analysis instead."