Westport, CT As part of its consulting practice, Worth Avenue Capital, LLC (WAC) closed a Forbearance Agreement for a Conn. based retail furniture company that has been in business since the 1950’s. Specifically, WAC’s client has an existing $200,000 commercial loan with a  community bank that reached its maturity date. The bank subsequently called the loan seeking immediate full repayment of the debt. Since the borrower was unable to fully repay the loan at this time, WAC was retained by the company and negotiated a debt restructuring of the loan with the bank that is characterized by monthly principal and interest payments as well as a two year Forbearance Agreement on behalf of the borrower. WAC worked in conjunction with its legal counsel who was brought in once the negotiations were finalized to review and sign off on the loan documents in the transaction.

A Forbearance Agreements is a vital tool for a small business that is no longer in good standing with a bank who is one of their creditors. The Forbearance Agreement acts as an “insurance policy” for the small business and, provided that the business adheres to the terms and conditions of the agreement, ensures that the bank cannot begin a lawsuit or litigate against the small business for the full term of this agreement.

By closing this transaction, WAC enabled their client to avoid costly, stressful, and protracted litigation by the bank and also allow this business to repay the loan over time without totally destroying the company’s cash flow.

WAC specializes in arranging debt financing for both small businesses and real estate developers/investors and also handles bank workouts for those same clients. WAC maintains offices in both Guilford and Westport, Conn.