What is Forbearance Letter?

A forbearance letter is a written agreement between a borrower and a lender, in which the lender temporarily allows the borrower to either reduce or suspend their loan payments for a specified period. This arrangement can be beneficial to borrowers who are experiencing financial hardship or unforeseen circumstances, such as job loss, medical emergencies, or natural disasters, which may impact their ability to make timely loan payments.

The forbearance letter typically outlines the terms and conditions of the forbearance agreement, including the duration of the forbearance period, any revised payment terms, and the borrower’s responsibilities once the forbearance period ends. It is important to note that interest usually continues to accrue during the forbearance period, which can increase the overall cost of the loan.

OTHER TERMS BEGINNING WITH "F"

  • Factoring

    Invoice Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to…

  • Factoring Advance

    A cash advance to a Client (usually by wire transfer or ACH) for 80-90% of the value of the purchased and verified Invoice. Our goal at ECapital is to verify and fund the same day as invoice receipt (if before…

  • Factoring Company

    A factoring company is a financial institution which buys the accounts receivables of your businesses. The factor can buy your invoices taking the credit risk on a non-recourse basis. A factoring company can also offer you other services including risk…

  • Factoring Discount Fee or Factoring Rate

    The Factoring Discount Fee or Factoring Rate is the cost to you for Invoice Factoring, A/R Management, and Credit Protection from eCapital. It is typically based on your monthly volume and creditworthiness of your Customers (the Account Debtors) and can…

  • Factoring Line of Credit

    Factoring Line of Credit is an alternative financing option that's unique to eCapital. Acting much the same as a business line of credit, it provides access to funds as needed with fees paid only on funds drawn plus a small…

  • Factoring Receivables

    Factoring Receivables is a type of financing where a business will sell its good invoices to a factoring company. Invoices can be sold on a recourse or non-recourse basis. Factoring Receivables is not bad debt collection.

  • Factoring Reserve

    The first payment to your company, the Factoring Advance, is typically 80-90% of the invoice value and is made once the invoice is received and verified. As stated above, our goal at ECapital is to verify and fund the same…

  • Federal Acquisition Regulations (FAR)

    The Federal Acquisition Regulations (FAR) is a substantial and complex set of rules defining the federal government's purchasing process with suppliers. Selling to the government can be a great way to grow your small business, but it can be intimidating.…

  • Financial Distress

    Financial distress is a term in corporate finance used to indicate a condition when promises to creditors of a company are broken or honored with difficulty. This is generally due to high fixed costs, illiquid assets, or revenues sensitive to economic…

  • Financial Statements

    The Financial Statements are the Income or Profit & Loss Statement and Balance Sheet of a company, which report the company’s sales, expenses, and profit (income statement) and its assets, liabilities and net worth (balance sheet). Financial statements can be…

  • Financing

    Finance is an all-encompassing term dealing with the allocation of assets and liabilities. It can describe the management of large dollar amounts by governments or Fortune 1000 companies. It can also describe the small business using invoice factoring or getting…

  • FinTech

    The term FinTech represents the emerging financial technology industry composed of companies using new technology and innovation to improve the delivery of financial services.

  • Fixed Interest Rate

    A fixed interest rate is when a rate of interest for a loan does not fluctuate and remains the same throughout the term of the loan.

  • Fixed Rates

    In agreeing a rate card with a staffing supplier, it may be possible to negotiate uniform, fixed candidate bill rates that are pre-determined for each job title. Such Fixed Rates are generally related to job title, job description and geography.

  • Forbearance

    In the context of finance, forbearance refers to a temporary postponement or reduction of loan payments, often granted by a lender to a borrower who is experiencing financial hardship. This can be due to job loss, medical emergencies, or other…

  • Fraud

    Fraud can be any number of dishonest practices whereby a client and/or Account Debtor attempts to defraud a factoring company.

  • Free on Board (FOB)

    FOB is an acronym for "free on board". In the US FOB is commonly used when shipping goods to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to…

  • Freight Factoring

    Freight factoring, also known as transport factoring, trucking/truck factoring, and freight bill factoring takes invoices and turns them into cash. Instead of waiting for 30, 60, or 90 days to be paid, freight factoring unlocks money already earned, so you…

  • Freight Recession

    A freight recession refers to a period of reduced demand for freight transportation services, leading to decreased shipping volumes and lower revenues for companies in the freight industry. This can be a result of various factors, including a general economic…

  • Front Office

    In a staffing context, the Front Office is part of the tech stack used to underpin the services of a Staffing Firm. The Front Office consists of three inter-dependent applications: Customer Relations Management (CRM), Applicant Tracking System (ATS) and Requisition,…