Forbearance
A temporary agreement where a lender allows a borrower to pause or reduce loan payments for a defined period, typically during a documented financial hardship.
Forbearance doesn’t eliminate the obligation to repay, it postpones it, and interest generally continues to accrue during the forbearance period unless the agreement specifically states otherwise, so the total amount owed afterward is usually the same or higher.
Requesting forbearance proactively, before missing a payment, is typically easier to arrange and better for the business’s credit than waiting until after a default has already occurred.
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