Sign Michigan Banking Forbearance Agreement Computer

Industry sign banking alabama forbearance agreement computer

[Music] my name is Steve Aoki a managing director and I head up the debt placement or capital sourcing team and we work with middle market clients we typically raise somewhere between five and fifteen million dollars of senior debt or mezzanine capital forbearance is an agreement that is between the borrower and the lender and forbearance really means holding back and that means that instead of the lender foreclosing on the borrower they come to an agreement and that agreement really benefits both parties so it benefits both parties by number one let's say that the borrower Tripta covenant or mr. payment the lender would come in and say let's have an agreement to extend for example the maturity of a note or let's reset some covenants so it's a it's a wait for the two parties to come together to communicate and really stop the foreclosure or liquidation process there is new documents the lender will draft a forbearance agreement which will be a legal agreement and then from that point on what the lender is trying to do is not waive any of the defaults but instead instead extend the forbearance period which is typically anywhere from say 60 to 90 days and during that period the two parties agree to meet certain conditions and if those conditions are met then the lender will not foreclose on more frequent communication perhaps weekly and then also what happens during that period is the lender may want to hire a consultant to oversee the process so there is definitely communication and oversight and then what they'll do during that period of time is the lender may ask for additional items they may come in and ask for more collateral it might ask for additional guarantees personal guarantees or corporate guarantees in a return for that the bank is or the lender is giving them or a lotta more time and that time may fix some of the problem both financially and from a collateral step [Music]