Our hardship and forbearance process

When a company is finding it hard to keep up with repayments, we would much rather work with you than leave you to struggle. This article explains how our hardship and forbearance process works, so you know what to expect before you get in touch. The aim is always the same: to find an arrangement that is realistic for your business and that gets the loan back on a sustainable footing.

Forbearance simply means giving a borrower room to recover, rather than pressing for payment your company genuinely cannot make. It is a normal, sensible part of lending responsibly, and asking for it is not something to feel awkward about.

Step one: tell us what has changed

Everything starts with a conversation. Contact us, ideally before a payment is missed, and tell us what has happened and how it is affecting your cash flow. We will listen, ask a few questions about your company’s income and outgoings, and look at what is affordable. Honest figures help us help you, even when the picture is not rosy.

The options we can consider

Depending on your situation, we may agree one of the following:

• A payment arrangement. If the difficulty is short-term, we can spread what is owed over a period your company can manage, then return to the normal schedule.
• A short freeze. Where you need breathing space, for example while you chase a large invoice or recover from a one-off shock, we may pause payments for an agreed time.
• A hardship variation. If the difficulty is more serious or likely to last, we can vary the terms of the loan itself to make it affordable over a longer period. You can read more in what is a hardship variation?.

We will talk through which option fits, explain what it means in plain terms, and confirm the new arrangement in writing so there is no confusion.

What we will and will not do

We will treat you with respect, keep your information confidential, and be clear about every step. We will never apply a charge that is not already set out in your Business Loan Agreement. We do not invent fees, and we do not add surprise costs as a penalty for being in difficulty. If a variation changes what you will pay overall, we will show you exactly how, and the figures will always trace back to the agreement you signed and the Key Information Sheet (KIS) you received.

Because we lend to your company for business purposes and take no personal guarantee from its director, our focus is on the company’s ability to recover. We will be straight with you about what is possible.

Get independent advice first if you want to

You are always welcome to take free, independent advice before or during this process, and we would encourage it. Business Debtline gives free, confidential debt advice to small businesses and the self-employed at businessdebtline.org or on 0800 197 6026. They can help you work out a budget and prioritise your debts. For the full picture of free help available, see where can I get free independent debt advice in the UK?.

What happens after an arrangement is agreed

Once we have agreed a way forward, we will put it in place and confirm the details to you. We will also pause unnecessary contact and any further collection steps while you stick to the new plan. If your circumstances change again, for better or worse, tell us, and we will review the arrangement. Plans can be adjusted; the important thing is to keep the conversation open. Reaching out early, and staying in touch, is what makes a good outcome far more likely.