Sample Letter to Lender on Overdue Principal and Interest Payments and Request to Restructure Loan Agreement
Dear Mr. (name),
Re: Overdue Debt Obligation - USDYYY
We refer to the subject and appreciate your patience in the matter. As discussed by phone, we are asking that you bear with us for another month for the interest payment that was due on (date). The sale/collection cycle will start just about then and will provide some ease in the existing cash flow constraints.
With regards to the principal and additional interest obligations due prior, we are working on a number of funding options now and have no choice but to request a postponement of those payments. We instead would like discuss a restructured repayment plan more closely aligned to anticipated cash from the funding options being pursued.
To be specific, (company) is aggressively pursuing an equity partnership or a restructured loan with our bankers over a much longer period to ease the monthly cash flow burden. If any of the options materialize, realistically, we expect the cash flow to improve in a meaningful way in three to four months. We will however, continue to make regular interest payments in the meantime to ensure there is no increase in the debt owed.
We are hoping to be in a better position to speak frankly about the restructured payment plan next month when the most recent overdue interest payment will be paid. We apologize for the poor communication over recent times and look forward to your favourable response and continued patience.