Equipment finance companies are increasingly impacted by tightening loan covenant standards, which are restricting capital expenditures (CapEx) and operational flexibility for their clients. Over the past two years, traditional lenders have become more cautious, introducing stricter terms in response to rising interest rates, economic uncertainty, and shifting market dynamics. This article breaks down the specific changes in covenant standards and their implications for equipment finance companies, with a focus on the direct impact of restrictions on CapEx.

Tightening Covenant Standards: Then and Now