Dictionary of Banking Terms: standstill agreement
standstill agreement
agreement whereby a lender makes no further collection efforts on an unpaid loan, acting in the belief that foreclosure would jeopardize the ability of a borrower in financial difficulty to repay any portion of the debt. Such agreements are found most frequently in agriculture loans and loans secured by real estate, where both parties agree that a renegotiated loan is better than a defaulted borrower. The lender and borrower negotiate new credit terms that may include a lower interest rate and rescheduling of payment terms.
