Most founders read a term sheet the way they'd read a price tag: find the interest rate, compare it to the other offer, pick the lower number. Lenders read the same document looking at covenants, drawdown conditions and security — the parts that decide what actually happens if the project runs six months late or a payer changes its terms.
Covenants matter more than the headline rate because they decide how much room you have to breathe. A facility financed against aggressive revenue covenants can find itself in technical default in month four, even while it's trending toward profitability — simply because the covenant was set against a plan, not against how healthcare facilities actually ramp.
Drawdown conditions decide whether capital arrives when the build needs it or is released against milestones an early-stage project can't yet hit. We've seen financing that looked fully approved sit undrawn for months because the conditions precedent were never mapped against the actual construction timeline.
The security package — what's pledged, and what happens to it — is the clause most often skimmed and most consequential if a project slips. Comparing two offers on rate alone, without comparing these three, is comparing the wrong things. It's also the single most common reason we get called in after financing has already closed, not before.