Standing Tall When It Matters Most

The purpose of loan workouts for business owners

A commercial loan workout allows business owners to refinance their debt obligations. This option helps borrowers to afford their repayment plans and become more financially stable over time. Entrepreneurs in Texas who qualify for workouts can increase their cash flows and save money for more important business operations.

Reasons for workouts

A loan workout is the making of a revised agreement between the borrower and the lender. The borrower may want to revise the loan payment plan if their income status has changed. A business owner may need to pay for additional expenses, such as new equipment or more inventory, by increasing the amount of the loan.

Loan term modifications

Any loan term can be modified in workouts or a restructuring. The borrower and lender can agree to increase or decrease the loan amount and its interest. As a result, the borrower has to modify the payment terms and the duration of the loan. For example, a borrower may want to increase the loan amount, increase the monthly payments and decrease the lifespan of the loan.

Some companies want to change their pay periods or the dates that they make regular payments. Both parties can agree to change the maturity date or undergo a forbearance period to delay payments temporarily.

Business loan workouts allow owners to renegotiate the terms of their loans to improve the state of their businesses. The borrower and the lender have to agree that a workout is needed for the best financial interests of both parties. The benefits are to reduce the amount of the loan, reduce the interest and prevent a default to secure a more stable financial future.