A borrower trips a maintenance covenant. As the lender, what is your first move?

How to answer

First quantify the breach and assess near-term liquidity — how much cash and revolver capacity is left, and how long the runway is. Then work an options ladder from least to most severe: a covenant waiver or reset, an amend-and-extend, a sponsor equity cure, additional collateral or a fee bump, and only then a full restructuring or enforcement. You price every concession (spread step-up, fee, tighter terms) and decide whether the business is worth supporting or whether you should pivot toward maximizing recovery.

Key idea: Quantify breach and liquidity first, then climb the options ladder.