Business Hardship Letter - Sample
Restructure Credit - Reduce Interest Rate

Financial hardship letters in business situations are normally sent to major creditors, such as banks, when the business is experiencing temporary financial difficulty and needs some type of financial restructuring of their debt and/or credit lines. The real-life sample business hardship letter below seeks to increase an existing credit line and also to realign credit card debt at a lower interest rate.


                   (print Financial Hardship Letter (Business) on company letterhead paper)

April 25, 20xx

Mr. Donald Gustafson
Manager, Business Credit Services
Great Lakes Financial Services Inc.
3590 Drayton Avenue, Suite 750
Santa Monica, CA 95040


Dear Mr. Gustafson:

Re: Request For Debt Consolidation and Restructuring - Marbank Enterprises Inc.

Marbank Enterprises Inc. has been dealing with your company since our founding, 18 years ago. The purpose of this letter is to request your short-term assistance in helping us remain operational during a period of temporary financial hardship.

For almost two decades we have been a successful importer and wholesaler of electronic products from Asia. Unfortunately, in recent months we have started to suffer from the effects of the widespread "mini-recession" that struck the US economy last year. The primary reason for our cash flow problems is that sales of electronic products to end-consumers declined by more than 30% over a short period of time, leaving us with excess unsold inventory for which we have already paid. We are convinced this is a temporary situation. Industry experts and major economic indexes are indicating that we should be able to move this excess inventory within a few months.

We are therefore requesting two things from your company that will give us the short-term flexibility relief that we need to keep operating profitably in the near term:

  1. We would like an extension to our existing line of credit from $500K to $1 million. This would give us the flexibility we need to deal with this cash flow deficit over the next 6 to 12 months without negative impacts on any of our ongoing profitable operations.

  2. We would like to consolidate our two main outstanding business credit card account balances (total of $425K) and pay them off using the extended $1 million line of credit. This would allow us to then open one of your new Business Prime accounts at a much lower interest rate than the 6.95% that we currently pay. In essence, we would simply be transferring our current debt from a higher interest account to one with a much more manageable interest rate.

To help you assess our financial situation, I have attached a set of Marbank's financial statements from last operating year, as well as a sales forecast to the end of the current business year. You will notice that our current paid-up inventory is valued at $1.2 million. We expect to be able to sell at least 50% of this over the next six months.

On behalf of our management team and Marbank's 45 employees, I very much appreciate your consideration in this matter and look forward to hearing from you in the near future. If you have any questions, please don't hesitate to contact me at xxx-529-5477.

Yours sincerely,


David Smeltzer

Chief Operating Officer


attach: Marbank Enterprises Inc. - Financial Statements - 20xx

             Marbank sales and cashflow projections - current year


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