Equity Cure Capacity refers to the agreed ability of developers or sponsors to inject fresh equity into a property development finance structure when financial covenants, such as the Interest Cover Ratio (ICR) or Debt Service Cover Ratio (DSCR), fall below required thresholds. This mechanism provides lenders with reassurance that covenant breaches can be corrected without immediate enforcement action. For UK property developers, Equity Cure Capacity acts as a financial cushion, helping maintain loan compliance and supporting liquidity during stressed conditions. It is particularly relevant in property development finance UK transactions with complex capital stacks.
This sits beneath Capital Cushion Metrics, introducing a more specific variant of the measure without changing its core interpretation. It is commonly considered alongside Sponsor Liquidity Buffer, as both are closely related measures used to assess similar aspects of performance or risk. In funding terms, Equity Cure Capacity is most commonly encountered in connection with Secured Note with PG within the property development capital stack.
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