# What happens if we miss the target in a sustainability-linked loan?

Canonical: https://senseible.earth/answers/sll-kpi-target-missed-what-happens

Usually the interest margin steps up or a discount is lost for the next period. Missing a target is not normally a default, but failing to report or verify the KPI can breach the loan terms. Read the margin and reporting clauses before signing.

## Typical consequences

- A margin increase, or loss of a margin reduction, for the following period.
- Disclosure of the miss in the annual KPI report.
- No change to repayment, unless the loan says otherwise.

## Reporting still matters

Most loans require yearly KPI reporting and external verification. Missing that obligation is usually treated more seriously than missing the target itself.

## Before you sign

- Check how the KPI is measured and which data it uses.
- Agree how the baseline is recalculated if you grow or buy a unit.
- Set targets you can track monthly, not only at year end.

## What Senseible does here

Senseible turns invoices and bills into dated, fingerprinted emission records, the evidence a lender usually asks to see first.

- [SLL KPI examples](https://senseible.earth/answers/sustainability-linked-loan-kpi-examples)
- [SLL interest discount](https://senseible.earth/answers/sustainability-linked-loan-interest-discount)
- [What an SLL verifier checks](https://senseible.earth/answers/sll-kpi-verification-what-verifier-checks)

Sources: [Loan Market Association, Green Loan and Sustainability-Linked Loan Principles](https://www.lma.eu.com)

Last reviewed 2026-10-22.