COVID-19 RELIEF AND RECOVERY
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immediately go up to the default rate on
your outstanding balance.
A number of credit card issuers have
announced that they will work with cardholders
who are having trouble making
their payments, usually on a case-by-case
basis. Don’t be afraid to reach out. Keep
notes of any conversations you have with
them and be sure you understand the
impact of any payment arrangements on
your credit scores.
TALK TO YOUR LENDERS
Your lenders don’t want your business
to default on payments. If your business
can’t pay its bills due to coronavirus, they
may be able to work with you to restructure
your debt temporarily. If you’re facing
the prospect of not being able to make
payments, reach out to them sooner
rather than later.
If you have certain SBA loans, the
following relief may be available:
• SBA 7(a) loans: Lenders may defer
payments for 90 days or up to six months
(depending on whether the loan has been
sold on the secondary market)
• SBA 504 loans: Lenders may defer up
to six cumulative monthly payments or
20% of the original loan amount, whichever
is less
• SBA Microloans: Microloan intermediaries
may make deferments for up to six
months but deferment may not cause the
life of the microloan to extend beyond the
maximum six year maturity
• SBA Disaster loans: For those currently
repaying a disaster loan (from a previous
disaster), the SBA is automatically deferring
payments through the end of this year.
Some lenders are proactively working
with small business borrowers to help
them through this time. For example:
• Bank of America has announced small
business customers can request deferments
on small business loan payments.
Deferred payments will be added to the
end of the loan and would not in and
of themselves result in negative credit
reporting
• Funding Circle has implemented
a range of proactive measures to help
existing borrowers impacted by COVID
19. These measures include providing
impacted borrowers with forbearance and
other repayment flexibility, electing not to
report borrowers as “late on payment” to
the credit bureaus and waiving late fees
for borrowers in forbearance due to the
COVID-19 pandemic.
CALL YOUR LANDLORD
If you are having trouble paying rent for
your business location, don’t ignore your
landlord. Explain what’s going on and ask
to make smaller payments. Some will be
able to be more flexible than others, but
it’s unlikely landlords will be able to easily
rent that space, so there’s a good chance
they will work with you to avoid having it
sit empty.
REFINANCE YOUR
COMMERCIAL SPACE
If you own commercial property with equity,
consider refinancing it. Rates are very
low right now and some business owners
are reporting success refinancing to lower
their payments, or even to get cash out of
the property to provide a cushion.
Please keep in mind this information
is changing rapidly and is based on our
current understanding of the programs. It
can and likely will change. Although the
Florida SBDC at IRSC will be monitoring
and updating this as new information becomes
available, please do not rely solely
on this for your financial decisions. The
Florida SBDC at IRSC encourages you to
consult with your lawyers, certified public
accountants and financial advisers. v
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