Days Cash Clause Samples

The "Days Cash" clause defines the minimum amount of cash or cash equivalents that a party, typically a borrower, must maintain at all times, measured in terms of the number of days' worth of operating expenses or obligations. In practice, this clause requires the party to keep enough liquid assets on hand to cover a specified number of days of normal business operations, such as payroll, rent, or supplier payments. Its core function is to ensure financial stability and liquidity, reducing the risk that the party will be unable to meet short-term obligations and thereby protecting the interests of lenders or counterparties.