Operating change restrictions are contractual restrictions that a bank may impose on a firm as part of a line of credit agreement.

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Operating change restrictions are contractual restrictions that a bank may impose on a firm as a condition of extending a line of credit. These restrictions limit the ability of the borrower to make significant changes to its business operations without the prior approval of the lender. The purpose of these restrictions is to mitigate the lending risk by ensuring that the borrower continues to operate in a way that supports the repayment of the loan.

Operating Change Restrictions Are Contractual Restrictions That a Bank May