Jackson Hewitt Tax Service said today that it is unlikely to find a lender to fund half of its refund anticipation loan business for the upcoming tax season before a bank-imposed deadline. However, while failure to do so would constitute a default on its $375 million credit facility, the tax preparation company received a week extension on a key deadline and believes it will be let off the hook for default.

"The Company believes that it is unlikely that it will meet the RAL Requirements on or prior to December 17, 2010 and is in discussions with the Administrative Agent with respect to an amendment of these provisions of the Credit Agreement," Jackson Hewitt noted in documents filed with the SEC. The statement continued that the company believes it will succeed in getting a waiver.

While the statement did not say that the company will fail to find a financial backer befor tax season, it has few choices few for funding any additional RALs.

Republic is funding the loans at half of the Jackson Hewitt locations, as it did during the 2010 tax season. The inability to provide RALs meant the chain saw a significant amount of business go elsewhere. The financial weakness led to a technical default on its loans, which was waived and the new lending agreement imposed.