The presence of COVID-19 is impacting our communities and the way that we live our daily lives. It affects everyone’s health and personal finances. Business owners and managers have the dual challenge of dealing with these issues not only on a personal level with respect to themselves and their families but also on a corporate front in planning for their business. Employees, customers, vendors and many other issues need to be considered. The various closings, quarantines and stay-at-home requirements are reducing activity and in many cases stopping business completely.
One of the issues to be planned for is what to do about upcoming loan payments. Some considerations in this area include:
- Be proactive with your lender. Call them to discuss your situation. Your issues will not be a surprise to them as that is the world in which we all find ourselves. Remember that they want you to succeed and to be a satisfied customer of theirs through this difficult time and for many years to come.
- Work with your lender to make adjustments that work for both sides. A 90-day deferral of principal and interest on term loans, a 90-day deferral of interest on lines of credit, requests for new lines of credit or increases in current lines are all reasonable alternatives. Your lenders will want to know your plans for repayment when we return to what will then be our new normal but that does not need to be part of the initial conversation.
- Look into remote cash management techniques. This would include greater use of online banking, remote capture for check deposits, ACH and wire origination, bank bill paying and other web-based bookkeeping systems. We recommend using Bill.com, which is software that allows for easy bill paying, faster collection of accounts receivable and an efficient bill approval process. We use this software every day in our virtual bookkeeping department and would be happy to discuss how this affordable software can meet your needs.
We at DunlapSLK are here to support you during these unprecedented times. Please let us know if we can help you deal with these issues including projections for your lender and cash management alternatives.