Request Relaxation Of Covenants In Credit Terms
[DATE, ex. Wednesday, June 11, 1998]
[NAME, BANK AND ADDRESS, ex.
John Smith
XYZ Bank
1234 First Street
Suite 567
Anycity, Anystate 85245]
Dear [NAME, ex. John Smith],
According to the terms of our credit arrangement with you, we are required to maintain [STATE COVENANT WHICH YOU EXPECT TO BREAK, ex. a debt to equity ratio of 2 to 1].
[EXPLAIN REASONS FOR RELAXING OF COVENANT, ex. As you may be aware, our business is seasonal, and this year, we are experiencing record orders for our products. Although this is desirable from a sales and profitability perspective, it requires additional capital to finance the growth, and we have raised this amount privately by way of debt].
We expect to be back in a position to maintain our covenants within a few months.
Please feel free to call me if you have any questions.
Sincerely,
[YOUR NAME, ex. Jill Jones]
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