Covenant compliance certificate template with a one-time license footnote
A covenant compliance certificate is a signed statement from a responsible officer to the lender confirming the borrower met its financial covenants for the period, with calculations attached. This template adds a schedule for non-recurring income so a possible data license is footnoted and checked against the agreement's definitions before anything is signed.
When do you use a compliance certificate?
You prepare one whenever the credit agreement says so, typically quarterly or monthly, together with the financial statements. A responsible officer signs it, and the lender relies on it. Sample clauses such as Law Insider's reporting certificate show the common structure, but your client's agreement is what controls, and it sets definitions, deadlines and who may sign.
Certificate template
Copy the text into a Word document and replace the placeholders. Have counsel review it before use.
Schedule 1: covenant calculations
| Line | Description | Source | Covenant test |
|---|---|---|---|
| 1 | Net income for the test period | Income statement | n/a |
| 2 | Add back: interest, taxes, depreciation, amortization | Trial balance | Per definition |
| 3 | Add back: permitted non-cash and non-recurring items | Schedule 3 | Capped? Check |
| 4 | Consolidated EBITDA | Lines 1-3 | n/a |
| 5 | Total funded debt | Debt schedule | Leverage ratio |
| 6 | Fixed charges | Fixed charge schedule | Coverage ratio |
| 7 | Result against threshold | Line 4 over 5 or 6 | Pass / fail / headroom |
The Manifest loan covenant checklist and GoDocs financial covenants overview are useful background on how covenants are structured.
Schedule 3: non-recurring income and a possible license
This is the schedule that earns the template its title. Before any license is signed, check how the agreement treats one-time income.
| Question | Where to look in the agreement | If yes | If no |
|---|---|---|---|
| Does Consolidated Net Income exclude extraordinary or non-recurring gains? | Definition of Consolidated Net Income | Proceeds may be excluded from the covenant test | Proceeds may count |
| Does the EBITDA definition cap non-recurring items? | EBITDA definition | Add-backs limited | Review other limits |
| Is an exclusive license treated as an asset disposition? | Negative covenants, asset sale baskets | Check consent, mandatory prepayment | Likely fine, confirm |
| Must proceeds prepay the loan? | Mandatory prepayment section | Plan cash accordingly | Cash is available |
| Does the lender need notice? | Notice of material events | Give notice before signing | Standard reporting |
If the agreement is silent, ask the lender in writing. Do not put an unsigned license in the certificate; see going concern management plans for the same caution on disclosure. Where the borrower has a revolver, read borrowing base certificates for how a receivable from a one-time license may fall outside eligibility.
This is general information, not legal, tax or financial advice. Confirm with counsel and the lender before acting.
Who this helps
CFOs and CAS teams who sign or prepare these certificates see detailed history of the company's systems. If a client has 50+ full-time employees at peak (contractors excluded), several years of records across many systems, rights to license them and an authorized sponsor, a quiet fit screen is reasonable. The headcount planning template checks size, the price increase analysis template shows another model that lives on system history, and the company fit checker is a non-binding first screen. The who qualifies page has the baseline.
How to personalize and when to follow up
| Item | Personalize with | Timing |
|---|---|---|
| Section references | The client's actual agreement numbers | Before the first quarter-end use |
| Schedule 3 | The client's definition of EBITDA | When the agreement is amended |
| Footnote | Actual receipt date and treatment | Only after payment |
| Lender notice | Early heads-up if a license may be exclusive | Before signing, not after |
What never to include
Never include confidential records, buyer names, unsigned deal values, or promises of partner rewards in a lender certificate. Partners make introductions and share basic fit information only.
How rewards work
Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 cumulative per referred company. The reward is paid only after the buyer pays and SourceX receives its fee, it is never deducted from what the company receives, and no reward is guaranteed. CPAs should check ethics rules on referral fees and disclosure first. Read the program terms and the referral opportunities for fractional CFOs page.
Next step
If a client fits, register as a partner and make the introduction. For the wider practice view, see what CAS growth means for referrals.
- Step 1Share your linkSend your personal link to a company you know.
- Step 2Company appliesThe company applies itself at /apply.
- Step 3Buyer selects and paysThe buyer selects and pays for the data and SourceX receives its fee.
- Step 4You get your rewardYour share of SourceX fees becomes payable.
Common questions
Who signs a compliance certificate?
The credit agreement names the officer, usually a chief financial officer, treasurer or other Responsible Officer. Check the definition in your client's agreement, because lenders can reject a certificate signed by someone outside it.
How often is a compliance certificate due?
The agreement sets the schedule. Quarterly with financial statements is common, and some agreements require monthly delivery. Sample clauses show a deadline after period-end, but only your client's agreement controls.
Does one-time license income count toward covenant EBITDA?
It depends on the definitions of Consolidated Net Income and EBITDA, any caps on add-backs and the treatment of asset dispositions. Read them before signing anything, and ask the lender in writing if the wording is unclear.
Should we tell the lender before a license is signed?
Often yes, if the agreement restricts asset sales, IP licenses or requires notice of material events. Early notice usually costs little, while a missed consent can create a default. Counsel should review the specific clauses.
Do I need to share records with SourceX to prepare this?
No. The certificate is a finance document and the introduction shares only basic fit information. The company works with SourceX directly on inventory and delivery, and only after an executed agreement.
Related pages
- Can an unsigned data license count as a going concern management plan?
- What is a borrowing base certificate, and where does a license receivable fit?
- Headcount planning template with a peak full-time headcount line
- Price increase analysis template for B2B companies
- Check Company Fit for Data Licensing
- Which US businesses are a fit for a SourceX data licensing introduction
Free resources
- Time value of money calculator — Future and present value with optional regular payments.
- Business DSCR calculator — Debt service coverage from cash flow and loan terms.
- MCP ROI calculator — Estimate hours saved, implied savings and first-year ROI from MCP.
- All free tools · MCP resource center
By SourceX Partnerships Team · Published 2026-10-09 · Updated 2026-10-09
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