Compliance certificate
What is a compliance certificate on a business loan?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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A compliance certificate is the borrower's signed statement, delivered with each set of accounts the facility requires, that it has met its financial covenants — with the calculation showing how. It is where the covenant definitions meet the numbers, and where a lender first sees a test tightening. A desk reads the workings rather than the conclusion, and treats a certificate that arrives late, or with a definition quietly reinterpreted, as information in itself.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
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