--- title: "Loan Covenant Monitoring With AI Agents | Kylon" description: "How a commercial lending team tests covenants each quarter, audits the exception report and absorbs restatements and late certificates, with a person approving each tier." url: "https://kylon.io/use-cases/loan-covenant-monitoring" language: "en" --- [HOME](https://kylon.io/)\>[Use Cases](https://kylon.io/use-cases)\>Loan Covenant Monitoring: Ratios Recomputed Whenever a Borrower's Numbers Change Use Case7 min read # Loan Covenant Monitoring: Ratios Recomputed Whenever a Borrower's Numbers Change Every quarter each loan is tested against its covenants, and the result decides who watches it. Agents compute ratios from Box statements and read certificates in Outlook inside one Kylon room, and the portfolio manager approves each disposition and tier before Salesforce changes. [Get started](https://app.kylon.io/sign-up) Kylon TeamProduct November 6, 2026 ## Covenant tests that hold only until a borrower restates Each quarter, every loan in the book is tested against its covenants: debt service coverage, leverage, minimum liquidity, and timely delivery of a compliance certificate signed by the borrower's finance lead. The result is a disposition for the loan and an escalation tier that decides who watches it: the relationship manager, the credit officer or the special assets team. Loan agreements and quarterly statements are in Box, certificates arrive in the covenant mailbox in Outlook, the loan records and tiers are in Salesforce, and the exception report is a Google Drive document. Borrowers restate, certificates arrive late, and relationship managers waive late fees. Each event means walking the full rule order again, and a quick edit to one field usually leaves the reason or the tier behind. ## Who works in the room People - Portfolio manager Approves every covenant disposition and escalation tier, and signs the watchlist closeout - Relationship managers Own each borrower, chase certificates and grant fee waivers within their authority - Credit analysts Spread financial statements and prepare the exception report Agents - FinCovenant tester Computes each loan's ratios from the Box statements and terms, reads certification status from the Outlook mailbox and proposes a disposition and tier BoxOutlookSalesforceGoogle Drive - AdaException report auditor Checks the analysts' exception report against the tested results and lists every line that disagrees Google DriveSalesforce - MycoBorrower correspondence Drafts replies on borrower threads for the relationship manager to send [Gmail](https://kylon.io/integrations/gmail) [Slack](https://kylon.io/integrations/slack) The portfolio team works in one room each quarter. Fin is the default agent and runs the tests, and it is the only agent with a grant on the covenant mailbox, so anything that needs a certificate goes to it. A question about the exception report reaches Ada, which owns that audit, and anything going to a borrower goes to Myco. When Fin re-tests a loan, it mentions Ada with the old and new results, so the exception report is corrected in the same thread. ## A covenant quarter, test to watchlist The rule order is in the policy and in the room guidelines, so every re-test follows the same sequence. An automation flags a loan in the room when its certificate due date passes, and Fin checks the mailbox for it. ```mermaid flowchart TD test["Fin tests each loan and proposes
a disposition and an escalation tier"] ok1["Portfolio manager approves
before Salesforce changes"] audit["Ada checks the exception report
against the tested results"] fix["Credit analysts correct the report"] restate([A borrower uploads restated
statements to Box]) waiver["Relationship manager
grants a fee waiver"] late([A certificate arrives
late in Outlook]) retest["Fin re-runs the loan through the full
rule order and proposes a new reason"] ok2["Portfolio manager approves
each change before Salesforce"] report["Ada corrects the exception report
line if the result changes"] reply["Myco drafts a reply naming the
loan ID on that borrower's thread"] send["Relationship manager sends it"] watch["Ada builds one watchlist per
relationship manager"] sign["Portfolio manager signs
the watchlist closeout"] test --> ok1 --> audit --> fix --> restate --> retest waiver & late --> retest retest --> ok2 --> report & reply reply --> send report & send --> watch --> sign class test,audit,retest,report,reply,watch agent class ok1,fix,waiver,ok2,send,sign person class restate,late event classDef agent fill:#FFFFFF,stroke:#DCD3C8,color:#1B1712 classDef person fill:#EEF0E3,stroke:#6E7447,color:#1B1712 classDef event fill:#F4ECDD,stroke:#F4ECDD,color:#564C42 ``` | Stage | What happens | Who acts | Who decides | | --- | --- | --- | --- | | Testing | Ratios are computed from the Box statements against the loan terms, and certification is read from Outlook | Fin | The portfolio manager approves before Salesforce changes | | Escalation tiers | Each loan gets a tier from its disposition and the size of the miss | Fin | The portfolio manager approves | | Exception report audit | The analysts' report is checked line by line against the tested results | Ada | Credit analysts correct the report | | Restated statement | Ratios are recomputed from the restated figures and the reason is rewritten | Fin, then Ada | The portfolio manager approves | | Fee waiver | The waiver is recorded and the disposition is walked through the rules again, not assumed | Fin | The relationship manager grants the waiver and the portfolio manager approves any change | | Late certificate | A certificate that arrives late in Outlook re-runs the loan through the rule order | Fin | The portfolio manager approves | | Watchlist closeout | One watchlist per relationship manager from the final Salesforce records | Ada | The portfolio manager signs off | Stages of a quarterly covenant cycle. Loans, ratios and thresholds in this example are illustrative. ## Restatements, waivers and certificates that arrive late A borrower's finance team uploads restated second quarter statements to Box with a note that an inventory write-down was booked in the wrong period. Fin recomputes coverage and leverage from the restated figures, not from the old spread, and writes a new reason on the loan. If the result changes, Ada corrects the exception report line, and Myco drafts a reply on that borrower's own thread naming the corrected loan ID. Some events look bigger than they are. A relationship manager waives the late fee on a certificate that arrived three days late. The waiver is recorded, but it does not make the loan compliant. Fin walks the loan through the full rule order with the certificate now on file, and the disposition follows from the tests. The portfolio manager approves each change before it is written to Salesforce. ## What the checks catch - A certification status taken from an old file in Box instead of the certificate in the Outlook mailbox - Ratios recomputed from the restated statement while the old reason stays on the loan - A reply posted on a similar thread for another borrower, or one that quotes the wrong loan ID - A fee waiver treated as a cure, when the covenant result is what decides the disposition - A watchlist that still shows a loan under a relationship manager who handed it over this quarter ## What stays with people - Approving every disposition and tier before Salesforce is updated - Granting fee waivers and deciding what to do about a breach - Sending every borrower email, which Myco drafts in Gmail for the relationship manager - Signing the watchlist closeout ## Integrations in this workflow Kylon is not a loan servicing system and it does not replace one. It sits across Salesforce, Box and the mailboxes the portfolio team already uses, and keeps each quarter's tests and reasons together. - Box - [Gmail](https://kylon.io/integrations/gmail) - Google Drive - Outlook - Salesforce - [Slack](https://kylon.io/integrations/slack) - **Salesforce** holds the loan records, dispositions, escalation tiers and watchlists - **Box** holds the loan agreements with covenant terms and each quarter's financial statements - **Outlook** is the covenant mailbox where signed compliance certificates arrive - **Gmail** carries threads with borrowers' finance teams, answered through drafts a relationship manager sends - **Google Drive** keeps the covenant policy and the exception report - **Slack** is where relationship managers post borrower news and waiver decisions ## Where to start A good first cycle is one quarter and one relationship manager's book. Connect Salesforce, point the room at the Box folders for statements, give Fin a lasting grant to read the covenant mailbox, and add one rule to the room guidelines: agents propose dispositions and tiers with the ratios behind them, and the portfolio manager approves before any loan record changes. > “A restatement now means new ratios and a new reason, every time, not an edited cell.” ## Set it up with your agent Open a new Room, add your agent and paste this prompt. It connects the tools, builds the App with you and asks for your rules one step at a time, and nothing goes out until a person approves it. Set-up prompt Set up our loan covenant monitoring desk in this Room. Take it one step at a time and wait for my OK before you move on. 1. Connect Box, Gmail, Google Drive, Outlook, Salesforce and Slack. Tell me which ones still need connecting, and confirm the grant to read the covenant mailbox in Outlook. 2. Ask me who works this desk: the portfolio manager, the relationship managers who own each borrower and grant fee waivers, and the credit analysts who spread statements and prepare the exception report. Help me invite them to this Room. 3. Build a Covenant Tests App with Loan, Covenant, Result and Status columns, one record per test. Pull open loans from Salesforce and match them to their Box folders. 4. Compute each loan's ratios from the Box statements and terms, read certification status from the Outlook mailbox, and propose a disposition and escalation tier for each. Show me every loan that fails or is missing a certificate. 5. Check the analysts' exception report in Google Drive line by line against the tested results and list every line that disagrees. 6. Draft borrower replies on the correct borrower thread in Gmail, naming the right loan ID. The portfolio manager approves every disposition, tier and watchlist closeout before anything is written to Salesforce. Relationship managers send every email. 7. Write our rules and who approves what into this Room's guideline so every re-test and restatement follows the same sequence. 8. After one clean quarter, offer to turn the certificate due date check into an Automation. Before you start, ask me for our rules one at a time. [Get started](https://app.kylon.io/sign-up) Your first company harness. Where humans and agents run your business together. [Get started](https://app.kylon.io/sign-up) ## More Use Cases [View all](https://kylon.io/use-cases) [ ### Annual Credit Review: Limits and Holds Set by Policy, Account by Account Twenty-six credit accounts, one limit table and a steady stream of corrections. Agents in one Kylon room read Stripe payment history and Box credit reports and propose each limit and hold for Salesforce, and the credit lead approves every change before it is written. 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