Lender Forbearance
Also known as: Forbearance Agreement
Definition
Lender forbearance is a negotiated pause in enforcement after a borrower misses a covenant, payment, reporting requirement, or other obligation. It typically requires a cash forecast, milestones, fees, reporting cadence, and a credible turnaround plan.
Forbearance is not forgiveness. It buys time only if management uses the window to stabilize cash, communicate clearly, and hit milestones.
The stronger the 13-week cash forecast and operating plan, the more credible the request.
Related terms
- 13-Week Cash Flow — A rolling short-term cash forecast used to manage liquidity, runway, lender discussions, and turnaround decisions.
- Cash Runway — The number of months a company can operate before cash runs out at the current burn rate.
- Covenant Breach — A failure to meet a financial or operational requirement in a credit agreement.
Where this gets applied
- Financial Infrastructure — ARR waterfalls, deferred-revenue rules, board-pack standardization, FP&A architecture.
- Project Recovery — Stalled programs unblocked. We've rescued $13M and $3M Fortune 500 initiatives in under 30 days.