When a loan is not meeting one or more of the Loan Covenants in the Loan Agreement. The Borrower will need to take steps to rectify this situation as soon as possible; for instance if there is a LTV Covenant breach due to a re-valuation of the asset by the lender, then the Borrower will need to inject more Equity to reduce the Loan. Such instances are normally covered within the Cure Rights of the Loan Agreement.
