Forbearance

Definition

A lender's written agreement to pause enforcement for an agreed period.

Why It Matters

It buys time without forgiving anything, which is exactly what a business with a fixable problem needs and exactly what one with a broken model should not mistake for a rescue. The missed payments usually still accrue and are added back to the balance or the term. Get it in writing every time: an informal assurance from a relationship manager is not a defense against the collection process the loan documents already allow.

In numbers: A 90-day forbearance on an $8,000 monthly payment defers about $24,000, which lands back on the loan rather than disappearing.