Small business owners who are impacted by the Coronavirus (COVID-19) pandemic should immediately consider how access to capital can help them weather this emergency. BoeFly has engaged with our lending partners to identify options for our franchisor and franchisee clients. Below are immediate options, but we’ll be monitoring this situation closely and will advise as new options come online.
- For businesses with SBA loans: Contact your bank and request a deferment. Your bank has unilateral authority to provide temporary relief in the form of a deferment. With unilateral authority your bank can act without SBA approval. Banks can defer your loan for up to three or six months. [A max deferment of three months if the bank has sold the guaranteed portion of your loan; a maximum of six months if the bank has retained the loan.]
Tips on seeking a 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 to your business.
- Ask for the SBA servicing department: When you contact your SBA lender, your best contact person is the SBA servicing department.
- Be persistent: Access to capital is your lifeline and your willingness to persist in the face of apparent hurdles is important.
- For businesses without an SBA loan or those in need of working capital due to substantial economic injury: The SBA has created a Coronavirus (COVID-19) Disaster Relief Loan Program. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75%. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. The first step is to determine if your state and county are included through state-issued Emergency Declarations. Visit this URL to confirm your county is covered: https://disasterloan.sba.gov/ela/Declarations.
Once you determine your county is eligible, begin the application here: https://disasterloan.sba.gov/ela/Account/Login?ReturnUrl=%2Fela%2FLoanApplication%2FStartApplication
- Businesses with SBA loans and who seek additional capital: Your best option here is to first seek a deferment and then apply for a Disaster Relief Loan (combine 1 & 2 above).
BoeFly is available to discuss specific cases, and as always, to support business owners in efficiently accessing capital.