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Restructure
Also called workout, modified payment plan, hardship plan.
A negotiated change to the terms of a distressed deal - smaller payments over a longer period, sometimes with deferrals or added fees - documented as an amendment or a replacement agreement.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
It differs from reconciliation, which is a contractual right exercised under the existing agreement, and from settlement, which reduces the total owed. A restructure preserves the full obligation and changes how it is collected.
What funders typically ask for in exchange: current bank statements and often a cash flow projection, an acknowledgement of the outstanding balance, sometimes additional collateral, sometimes a new or reaffirmed guarantee, and in some jurisdictions a confession of judgment where one is still enforceable against a commercial defendant. The relief is real; so is the consideration.
The economics usually go one way. Payments fall, the term extends, and the total often rises where fees are capitalised or a modification charge is added. That trade can be entirely correct for a business with a timing problem and entirely wrong for one with a solvency problem.
Timing matters. A restructure negotiated before a default and while payments are still clearing is a different conversation from one negotiated after debits have bounced and the balance has been accelerated.
Where this one catches people
Restructure paperwork routinely contains more than the payment change: a reaffirmed or expanded guarantee, an acknowledgement of the balance that extinguishes defences you may have had, a general release of claims against the funder, and occasionally a confession of judgment. Read it as a new contract rather than as a payment plan, because that is what it is.
Where you will meet this term
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Restructure — common questions
What does restructure mean?
A negotiated change to the terms of a distressed deal - smaller payments over a longer period, sometimes with deferrals or added fees - documented as an amendment or a replacement agreement.
Where does restructure catch people out?
Restructure paperwork routinely contains more than the payment change: a reaffirmed or expanded guarantee, an acknowledgement of the balance that extinguishes defences you may have had, a general release of claims against the funder, and occasionally a confession of judgment. Read it as a new contract rather than as a payment plan, because that is what it is.
Is restructure the same as an interest rate?
Restructure is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does restructure apply to?
Merchant Cash Advance, Working Capital, Term Loan, Business Line of Credit.
Is there a worked example of restructure?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside restructure?
Acceleration clause, Confession of judgment, Event of default, Forbearance, Loan modification.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.