Talk to your lender if you are experiencing or expect to experience cash flow problems, if you haven’t already.
Plan for the next 3-6 months if you haven’t already. Many people/businesses we’ve heard from had sufficient funds or access to capital for the first 2-3 months; however, we don’t know how long this will last so look ahead. Both in terms of a potential lengthening of the pandemic, but also in terms of how you will handle a recovery, and re-opening of a business if you are currently closed.
All loan programs still require some information in order to underwrite the loan, including many of the government programs being talked on the news and in trade publications. Be ready to produce required documentation quickly to help your lender with your application.
For example, the Paycheck Protection Act is intended to help cover 2 ½ months’ worth of payroll – good idea to gather 12 months’ worth of payroll data so an average can be determined and verified.
There is plenty of liquidity in the system (unlike what may have existed in 2008) so don’t panic and draw on lines of credit unnecessarily. We are encouraging consumers and businesses to keep excess cash in insured financial institutions and to keep the lines of credit intact until you absolutely need to access them. There may be costs associated with accessing those and if you don’t need to incur the added expense, don’t.
Have patience – the industry wants to help you through these unprecedented times but not all programs are in place yet, and even when they are, technology can cause hiccups or delays (e.g. systems crashing).
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