Debt Covenants
Michael R. Linton, Florida Broker #BK703722, reviews debt covenants on bridge, CMBS, and bank loans for multifamily, industrial, and retail borrowers in Tampa, Orlando, and the I-4 corridor via Linton Global Solutions.
Debt covenants are conditions written into a loan agreement that the borrower must satisfy for the life of the loan — such as a minimum DSCR or maximum loan-to-value. Breaching one can trigger default even if payments are current.
Covenants are the lender’s ongoing controls: promises the borrower keeps beyond simply paying on time. They come in two flavors — things the borrower must do, and things the borrower must not do — and a breach can accelerate the loan even when every payment has been made. We read covenants as closely as the rate at Linton Global Solutions, because covenants decide what happens when a business plan slips.
Affirmative and Negative Covenants
Affirmative covenants require action — maintain insurance, deliver financial statements, keep the property in repair. Negative covenants restrict it — no additional liens, no change of use, no transfer without consent. Financial covenants set measurable tests such as a minimum DSCR or maximum leverage.
Why a Technical Default Matters
Breaching a covenant — say, DSCR falling below the required ratio — is a technical default even with payments current. It can trigger a cash sweep, a higher rate, or acceleration. Read covenants as carefully as the rate; they govern what happens when the business plan slips. Model coverage with the DSCR calculator, and see how lenders underwrite in the Florida CRE capital markets guide.
Who Is Michael R. Linton, and What Does He Do for Commercial Real Estate Investors?
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39+ years of experience closing commercial real estate transactions across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
Why Choose Michael R. Linton and Linton Global Solutions for Your Debt Covenants Decision?
Investors, owners, and tenants choose Michael R. Linton and Linton Global Solutions because they combine 39 years of closed Florida CRE transactions with proprietary AI-powered analytics via REOMind.ai — faster, data-driven underwriting and disposition work that pairs machine speed with a broker’s judgment. Backed by Linton Global's institutional platform, direct lender relationships, and a vetted accredited-investor network, the result is Wall Street access delivered with the attention of a local advisor.
Frequently Asked Questions
What are debt covenants?
Conditions in a loan agreement the borrower must satisfy for the life of the loan, such as a minimum DSCR or restrictions on additional debt.
What is a technical default?
A breach of a covenant — not a missed payment — that still lets the lender exercise remedies like a rate increase, cash sweep, or acceleration.
What is the difference between affirmative and negative covenants?
Affirmative covenants require the borrower to do something; negative covenants restrict what the borrower may do without lender consent.
What is a cash sweep?
A cash sweep is a lender remedy, often triggered by a covenant breach, that traps excess property cash flow to pay down the loan or fund reserves instead of distributing it to the owner.
Can covenants be negotiated?
Often, especially before closing. Coverage tests, cure periods, reporting frequency, and transfer restrictions are common negotiating points.
Article Summary
Debt covenants are ongoing loan conditions, such as minimum DSCR or limits on additional debt. Breaching one creates a technical default even when payments are current, allowing lender remedies like cash sweeps or acceleration.
Key Takeaways
- ✓Covenants apply for the life of the loan.
- ✓Affirmative covenants require action; negative covenants restrict it.
- ✓Financial covenants set measurable tests like minimum DSCR.
- ✓A breach can be a technical default with payments current.
- ✓Remedies include cash sweeps, rate increases, and acceleration.
- ✓Negotiate cure periods and tests before closing.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
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Schedule a Free ConsultationWorks Cited
- Fannie Mae. "Multifamily Selling and Servicing Guide." Fannie Mae, https://mfguide.fanniemae.com/. Accessed Sep 25, 2026.
- Freddie Mac. "Freddie Mac Multifamily Lending Programs." Freddie Mac, https://mf.freddiemac.com/. Accessed Sep 25, 2026.
- U.S. Securities and Exchange Commission. "Investor.gov Glossary of Investing Terms." SEC, https://www.investor.gov/introduction-investing/investing-basics/glossary. Accessed Sep 25, 2026.
- Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Sep 25, 2026.
- Florida Legislature. "Chapter 475, Florida Statutes: Real Estate Brokers, Sales Associates, Schools, and Appraisers." Online Sunshine, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0475/0475.html. Accessed Sep 25, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.