We demonstrate theoretically and empirically that monopolistic or collusive banks will keep lending to a loss-making firm at an interest rate lower than the prime rate if the firm is located in an influential position in an interfirm supply network. An influential firm generates a positive externality and its exit damages the sales of the supply network. To internalize this externality, the profit-maximizing banks undertake forbearance lending to an influential firm. Our empirical study with a unique dataset containing information about interfirm transactions and main banks provides evidence for such network-motivated lending decisions.