Recognition
The review is a credit decision, not a catch-up
It rarely feels like one. The relationship manager is familiar, the meeting is friendly, and the facility has rolled over before. But the decision is taken against a credit policy and a set of covenants, often by people you will never meet, on the strength of the information you provided. Treating it as a conversation rather than a submission is the single most common reason a business is surprised by the outcome.
What gets tested
Covenants, headroom and the direction of travel
Most reviews turn on a small number of things, and a covenant certificate that technically passes doesn't tell you how any of them will actually read:
- Covenant headroom, not just pass or fail. A covenant met by a whisker reads as a warning, not a clean pass, even though the certificate shows the same tick either way.
- Whether the facility has been used as intended. This is where hardcore overdraft borrowing (an overdraft that never actually clears) shows up.
- Whether filings and management information are current. Late filings weigh out of all proportion to their real significance.
- The direction of travel, not the snapshot. A business with thinning margin and lengthening debtor days is read differently from the same numbers moving the other way, even at an identical point-in-time figure.
What the certificate doesn't show: a covenant test is pass/fail on paper, but the credit decision behind it isn't. Two businesses can submit an identical "pass" and be read completely differently depending on how close to the line it was and which direction it's moving. Knowing which of your own covenants is genuinely tight, not just which one is technically met, is the difference between a review that's a formality and one that isn't.
Preparation
The window is three months, not three weeks
The useful work happens before the pack is submitted, not while it's being assembled under deadline.
Before the pack goes in
- Know which covenant is tightest, and what it will read at the measurement date: not today's figure, but the one the review actually tests.
- Reconcile the aged debtor and creditor listings so the numbers in the pack agree with the numbers in the accounts, before a reviewer finds the gap first.
- Have an explanation ready for anything unusual. An unexplained movement invites a question you then answer under pressure, not on your own terms.
- Establish early whether you're asking for the same facility, more, or a different shape. Those are three different conversations, and only one of them is a renewal.
If the answer is no, or not enough
Reduced, renewed on worse terms, or refused
None of these are the end of the matter, and all three are more workable if the search hasn't been left until after the decision.
Security
Watch the security release, not just the rate
If you move, the outgoing lender holds security that has to be released or ranked, and that step sets the timetable far more often than the credit decision does. If it holds a debenture, see borrowing with an existing debenture for what actually decides whether another lender can take a position. Established Finance is an introducer, not a lender, and this page is information rather than advice.
