Below are some strategic financial tips to consider preparing for today with the ever-changing situation.
The U.S. Small Business Administration (SBA) has released the following information regarding Coronavirus (COVID-19):
Existing SBA Loans
If your business has an SBA loan, your bank has unilateral authority to provide temporary relief in the form of a payment deferment from three to six months. Reach out to the bank’s SBA Servicing Department to initiate the deferment process.
Tips on seeking deferment:
- Be prepared: Have your recent tax returns, your interim financials (Income Statement and Balance Sheet), bank statements and a written statement defining the impact on your business (This is important to have written out and talking points ready).
- Ask for the SBA servicing department: When you contact your SBA lender, your best contact person is the SBA servicing department (always via email and then via phone).
- Be persistent: Your willingness to persist in the face of hurdles is important.
If you are leasing space, and in your first year growing the business, your Landlord may be willing to defer rental payments to the end of your lease term. Whether you are in an SBA eligible area or not it does not hurt for you to ask.
Tips on seeking rent deferment:
- Make the request in writing to your leasing agent and to the contacts in your lease under legal notices.
- Ask for 3-6 months of rent deferment and be prepared that the LL may want you to sign an amendment to the lease.
- Again, be persistent.
Disaster Loans/New Loans
Small businesses in states and territories that have been designated federal disaster areas, may apply for loans up to $2 million dollars. These loans can be used for payroll, accounts payable and other obligations that businesses are having trouble meeting due to the disaster impact. Please note: the interest rate is 3.75% for small businesses that do not have credit elsewhere; businesses with credit elsewhere are not eligible.
Again, we stand ready to be a resource for you in any way we can. Please do not hesitate to reach out with any questions at 865/315-7327 or BizInfo@tworld.com.
President, Transworld Business Advisors of Knoxville