2 min read
Definition
A forbearance plan is a short-term concession from a lender — a payment holiday, reduced payments, interest-only period or extended term — to help a borrower through temporary difficulty without triggering a formal default.
In plain terms
Lenders almost always prefer a workable plan to a default. The businesses that come out best are the ones that call first, not the ones that go quiet.
Why it matters for your company
If you can see a squeeze coming in your forecast, raise it early. Credicorp handles hardship with no-friction support. If the issue is structural, consider refinancing or a longer term facility.
Related reading
Repayment holiday
A repayment holiday is an agreed, temporary pause in loan repayments — interest usually still accrues, so the…
Read →
Refinancing
Refinancing is replacing one or more existing debts with a new facility — usually to lower the cost, extend…
Read →
Default
Default is when a borrower fails to meet the terms of a loan — most often by missing repayments, but also by…
Read →
Debt Restructuring: Business Options in the UK
Debt restructuring is the process of renegotiating the terms of existing debt obligations to make them more…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.