Can a covenant be broken

Yes of course it can, if a company breaks its covenant, and the bank declares the borrower's Loan(s) to be in default, the bank is entitled to take any number of actions to protect itself. At most severe, this could include demanding payment in full immediately, ceasing to advance new line of credit funds (working capital), repossession collateral, and legal action against the borrower.

Financial covenants are standards for the financial strength and performance of the borrower that serve as protections for both the bank and the borrower