In one sentence
A loan requirement that the borrower submit, and sometimes obtain lender approval of, the property's operating and capital budget each year.
The longer version
On many commercial loans the lender has a say in the property's annual budget, particularly capital spending. Approval rights protect the collateral from underinvestment or cash stripping.
Budget submissions and approvals are annual servicing events with documentation, and a common source of back-and-forth that benefits from a tracked, dated process.
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