You possibly can ask for a pause in enterprise mortgage funds when your corporation is having monetary hassle and also you need assistance managing your debt. These pauses in funds are typically known as “payment relief” or “deferments.”

It’s not unusual to ask for a cost pause, and your lender needs to be ready to listen to you out. If in any respect potential, it’s best to contact your lender earlier than your corporation’s monetary scenario turns into really dire.

Pausing funds isn’t your solely possibility. Your lender can focus on your numerous choices and the way every will have an effect on your mortgage funds.

We’ve developed this pattern script you need to use to name your lender.

This script was developed with enter from Kevin Janusz, vice chairman and SBA lending supervisor at Helpful State Financial institution and Maggie Ference, senior vice chairman, Small Enterprise and SBA director at Huntington Nationwide Financial institution.

You: “Hi, I’m hoping to speak with someone about a financial hardship I’m experiencing with my business and what my options may be for managing my loan payments.”

Lender: “Sure, I can see what I can do for you. Can you tell me more about the financial struggle you’re experiencing?”

You: “I’m having some cash flow issues, and I don’t have enough money at the moment to make my next few loan payments.”

Lender: ”Okay, and have you learnt what could also be contributing to the money move points?”

You: “Yes, [Explanation of Root Cause of Cash Flow Issues, e.g., difficulty hiring/retaining employees, loss of a key client account, supply chain issues, etc.].”

Lender: “That’s helpful to understand. And have you taken any action yet to address the issue and get back on track?”

You: “Yes, I’ve tried [Explanation of Efforts Made to Manage Cash Flow Challenges, e.g., multiple job postings on multiple platforms, new client outreach, attempts to negotiate better pricing in supply chain contract, etc.].”

Lender: “Ok. The more you can explain for me what’s led up to this point where you feel unable to make payments and the more documentation you can provide to show the steps you’ve taken to get back on track, the better position I’ll be in to help you.”

You: “Sure. I have my latest profit and loss statement and balance sheet. I also have [Documentation Proving the Efforts You’ve Made to Manage the Issue, e.g., screenshots of job postings on multiple platforms, ads or emails proving outreach to attract new clients, copies of communication with your supplier regarding contract negotiation, etc.]. I can send those over to you.”

Lender: “That’s great. Those should all be very helpful here. Please send those and any other documents you may have to support your request so I can review them in detail.”

You: “Ok. And if you accept the request, how long am I able to pause payments for?”

The lender’s response right here will fluctuate relying in your mortgage sort and the lender’s deferment coverage. Usually, you’ll discover {that a} pause may be anyplace from three to 6 months/funds.

You: “Will you report the pause to credit bureaus? If so, would that impact my credit score?”

Lender: “Yes, we do report deferments to the major credit bureaus. Typically, the payment pause is just noted in your credit report rather than directly impacting your score.”

You: “And how will the pause affect my future loan payments, once the pause ends?”

Lender: “Good question. The first thing to note is that interest will continue accruing on your payments, even while they’re paused. So that means your total repayment amount may increase. I can let you know how much your total repayment will be affected once I review everything more closely.”

You: “Oh wow, ok, I hadn’t thought of that.”

Lender: “Your monthly payments may increase for the duration of your term to account for the payments not made during the deferment period. Again, I can come back to you with the new loan amounts after I’ve reviewed your file.”

Observe: Relying on the lender and mortgage sort, as an alternative of elevated common funds you might have the choice of creating a single, giant cost, known as a balloon cost, on the finish of your mortgage time period. And a few lenders might permit you to prolong the mortgage’s time period size as a part of the deferment course of.

You: “I’m glad I asked. This is all really good to know. I guess I don’t really have a choice, though. At least if I can pause the next few payments that buys me time to figure out a longer-term fix and also make a plan for how I’ll handle the higher loan payments going forward.”

Lender: “Of course. There are also some other options we could look at for you instead of a pause in payments. For example, making interest-only payments or restructuring your loan or even opening a business line of credit.”

You: “You’ve given me a lot to think about.”

Lender: “Yes, there’s plenty to consider here. But you have options, and we’re happy to work with you to see what we can do to help. I think we should schedule a follow-up call in the next couple of days where I can run you through a few options with real costs. When’s the best time to reach you?”

You: “[Days and Times You’re Available].”

Lender: “Great, we’ll talk soon.”