Standstill agreement

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

A standstill is an agreement by a lender — or by several lenders together — not to demand repayment or enforce security for a set period while a borrower in difficulty and its lenders establish the position and agree what happens next. It buys time on terms: usually current information, a milestone plan and sometimes a fee, in return for the lenders holding their rights rather than using them. A standstill is not a waiver; the default remains, and the lenders' rights return in full when the period ends.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.